Welcome to the Florida auto insurance glossary of terms. Many of the terms used in your auto insurance policy can be confusing. That’s why we have this quick-reference guide for Bradenton and Sarasota drivers!
Whether you are shopping for a new policy in Palmetto or just trying to make sense of the one you already have, we are here to help.
If you’d like to put it in the hands of a professional, contact us and we’ll have a licensed agent reach out to you.
Florida Auto Insurance Glossary
Accident Forgiveness:
An optional endorsement that prevents your insurance premium from increasing after your first at-fault accident. This can be particularly beneficial in areas with heavy seasonal traffic like Bradenton and Sarasota.
Actual Cash Value (ACV):
The market value of your vehicle at the time of a loss, considering depreciation. Insurance settlements for totaled vehicles are often based on ACV.
Bodily Injury Liability (BI):
Coverage that pays for injuries to others if you’re at fault in an accident. Florida law requires minimum BI coverage in certain situations. Endorsements may include coverage for legal defense costs in addition to liability limits. Learn more about bodily injury liability coverage here.
Business Use Endorsement:
Business Use Endorsement can be added to a personal auto policy if you use your vehicle to drive from point A to point B for work. If you are not hauling or delivering goods or supplies, there is a very good chance you are eligible for the business use endorsement. Learn more about when to add the business use endorsement here.
Collision Coverage:
Pays for repairs to your vehicle after a collision, regardless of who is at fault. Endorsements may include diminished value coverage, which compensates for loss in vehicle resale value after an accident. Read more about collision coverage here.
Comprehensive Coverage:
Covers non-collision-related damages, such as theft, vandalism, or weather-related incidents. In Florida, hurricane or flood damage makes this coverage particularly valuable. Endorsements may include custom equipment coverage for aftermarket additions like upgraded sound systems or rims. Learn more about comprehensive coverage here.
Deductible:
The amount you agree to pay out of pocket before your insurance kicks in. Policies may offer a disappearing deductible endorsement, where your deductible decreases over time with a clean driving record. Higher deductibles have lower premiums than low deductibles.
Diminished Value Coverage:
An endorsement that compensates for the reduction in a vehicle’s market value after it has been repaired following an accident.
Emergency Road Service:
Coverage that provides assistance for incidents like breakdowns, flat tires, or dead batteries. This is especially useful in less-populated areas around Sarasota and Bradenton.
Flood-Prone Zones:
Both Bradenton and Sarasota have areas prone to flooding. Comprehensive coverage often includes flood damage, but endorsements for rental car reimbursement during repairs or towing from flood zones may be necessary.
FR-44 Insurance:
Required in Florida for drivers with DUI convictions. This form mandates higher liability coverage limits than standard policies. Some insurers offer endorsements for high-risk drivers to bundle FR-44 insurance with SR-22 filings.
Full Coverage:
A term often used to describe a combination of coverages, typically including liability, collision, and comprehensive insurance. It’s important to understand that “full coverage” doesn’t cover everything; always review your policy details.
Gap Insurance:
Covers the difference between your car’s value and the amount you owe on a loan, particularly important for newer vehicles. Endorsements may include extended lease coverage, which also pays penalties in the event of a totaled leased vehicle.
Glass Coverage:
An endorsement that covers the cost of repairing or replacing damaged vehicle glass, such as windshields, without a deductible. In Florida, insurers are required to replace damaged windshields without a deductible.
Golf Cart Coverage:
Many Florida neighborhoods, including Sarasota and Bradenton, allow golf carts on certain roads. Endorsements can include extended liability for street-legal golf carts or collision coverage for damage to the cart itself.
Hurricane Preparedness Discounts:
Insurers may offer discounts for vehicles stored in hurricane-safe garages. Endorsements can include expanded storm protection that covers debris damage or extended storage reimbursement during evacuation.
Liability Coverage:
Insurance that covers bodily injury and property damage to others for which you are legally responsible. This is a fundamental component of auto insurance. Learn more about liability coverage here.
Medical Payments Coverage (MedPay):
An optional coverage that pays for medical expenses for you and your passengers after an accident, regardless of fault. This can supplement Personal Injury Protection (PIP) in Florida.
No-Fault Insurance:
Florida operates under a no-fault system, meaning your own insurance pays for your medical expenses regardless of who caused the accident. Optional endorsements include additional medical payments (MedPay) coverage to extend benefits beyond the PIP limit.
Non-Owners Insurance:
A policy that provides liability coverage for individuals who drive but don’t own a vehicle. This can be useful for those who frequently rent cars or borrow others’ vehicles.
Personal Injury Protection (PIP):
Mandatory in Florida, PIP covers medical expenses and lost wages for you and your passengers regardless of fault. Florida’s PIP minimum is $10,000. Endorsements may include enhanced PIP limits or coverage for alternative therapies like chiropractic care. Learn all you need to know about PIP in Florida.
Premium:
The cost of your insurance policy, typically paid monthly, semi-annually, or annually. Some policies offer endorsements for usage-based pricing or pay-as-you-drive plans to lower premiums for low-mileage drivers.
Quote:
An estimate of your insurance premium based on provided information. Obtaining multiple quotes can help you find the best coverage at a competitive price. Get a quote from Carter Family Insurance.
Rental Reimbursement Coverage:
Pays for a rental car if your vehicle is out of service after an a covered claim. Enhanced endorsements may include higher daily limits or coverage for luxury rentals. Learn more about rental reimbursement.
Rideshare Insurance:
Coverage designed for drivers who use their personal vehicles for ridesharing services. Standard auto policies may not cover incidents occurring during rideshare activities. Learn more about rideshare insurance.
Roadside Assistance:
Provides towing, tire changes, and other emergency services, useful in rural or less-populated areas around Sarasota and Bradenton. Expanded endorsements may include coverage for trip interruption expenses like lodging. Learn more about roadside assistance in our guide to full coverage auto insurance.
SR-22 Insurance:
A form required for high-risk drivers in Florida to prove they have the required liability insurance coverage. Endorsements can help cover costs for required filings or add forgiveness benefits for minor violations.
Total Loss:
When the cost to repair a damaged vehicle exceeds its actual cash value, making it uneconomical to repair. In such cases, insurers may reimburse the vehicle’s market value before the accident.
Umbrella Policy:
Provides additional liability coverage beyond the limits of your standard auto or home insurance policies. This can be beneficial for protecting assets in the event of significant claims or lawsuits. Read about a real-life horror story from a client who rejected an $11/month, million-dollar umbrella.
Underwriting:
The process insurers use to evaluate risk and determine appropriate premiums for policyholders. Factors considered include driving history, vehicle type, and location.
Uninsured/Underinsured Motorist Coverage (UM/UIM):
Protects you if you’re hit by a driver without insurance or insufficient coverage. Florida has one of the highest rates of uninsured drivers. Learn more about uninsured motorist.
Usage-Based Insurance (UBI):
A type of auto insurance where premiums are determined by your driving behavior, often monitored through a telematics device. Safe drivers can benefit from lower premiums.
Vehicle Identification Number (VIN):
A unique 17-character code assigned to every vehicle, used to identify its make, model, and history. Insurers use the VIN to assess coverage options and premiums.
Windshield Replacement Law:
Florida law requires insurers to replace damaged windshields without a deductible. Endorsements can include expedited repairs or mobile replacement services.