Damage coverage in car accident cases tends to be quite straightforward: Either car damages and repairs will be paid by your insurance provider or that of a negligent party responsible for the accident, or they won’t. If they are not, you will likely have to pay for damages yourself. Even in a worst-case scenario in which the costs of repair exceed the cost of your vehicle, you can always scrap your vehicle and walk away.
However, when it comes to injury coverage, things tend to be much more complicated. Coverage for personal and/or bodily injuries that are caused by a vehicle accident, including coverage for passengers, are generally determined by state laws and the policies of the insurers covering those involved in the accident, as we discuss below.
To determine your rights as a passenger and whether or not passengers involved in an accident are covered by car insurance, we must first look at the different tiers of insurance coverage that are generally available to individuals who sustain bodily injuries in a car accident.
Three common tiers of bodily injury coverage include the following.
Bodily Injury Liability
This covers injuries that you are liable for, and it can range from $20,000 per person per accident to $500,000, depending on your policy.
Uninsured/Underinsured Bodily Injury Liability
This covers you in the event that you sustain injuries in an accident with a driver who does not have insurance coverage (or does not have enough in coverage protection to cover damages they cause in an accident).
Personal Injury Protection
Otherwise known as PIP, personal injury protection is used to cover injuries regardless of who is or was found to be at fault for an accident. PIP coverage limits are usually very low, often starting at $10,000 per person per accident, as outlined by the Florida Department of Highway Safety and Motor Vehicles (FLHSMV).
Next, we must look at whether or not your state is an at-fault (tort) state or a no-fault state.
Most states use a tort system in which law enforcement personnel assign fault for an accident to the party they determine to be responsible for the accident. The person who is found to be at fault, or their insurance company, will have to pay medical expenses, property damage, loss of wages, and funeral expenses to the other parties. If you’re a passenger injured in a car accident in a tort state, you will file a claim against the party who was at fault for the accident.
In the 12 no-fault states, one of which is Florida, individuals receive accident compensation regardless of who was liable for the accident. However, to receive coverage, you must have Personal Injury Protection (PIP) coverage, and passengers can file a PIP claim against the driver.
Now that we know the basic types of bodily injury coverage available and when to apply insurance coverage rules, the question is whether or not these coverage types or their limits apply to passengers.
Does Insurance Cover Passengers?
Passengers who are resident relatives – those defined as your spouse and any blood-relatives who reside in your home – will likely use your PIP cover in the event of an accident. Non-resident passengers are not covered by PIP. This is because PIP is name-insured i.e. it applies to insurance holders based on name and only applies to PIP holders and their resident relatives. As a result, passengers must use your or their own general bodily injury cover.
If the accident was not your fault, they may receive a portion of their damages from the insurance company of the at-fault motorist’s insurance company. Passengers can even seek coverage from their own insurance provider to cover some of their expenses. In doing so, they may be successful in getting their insurer to pay for their damages, and the insurer will then pursue an at-fault case against the negligent party responsible for the accident in order to extract payment from them directly or from their insurer.
The Bottom Line
Because you can never really know when you might be a passenger in an accident, you should always carry ample insurance coverage. If you live in a no-fault state, you may elect to pay for higher PIP cover. Visit the Insurance Information Institute for more in-depth information on no-fault insurance laws.
You can also pay for higher uninsured or underinsured motorist cover since not everyone on the road drives with insurance coverage, and you may be involved in an accident with someone who is unable to cover you for the damages they cause you. It pays to be prepared, and with medical costs as high as they are, having a sound insurance plan to fall back on is the best thing you can do after exercising safe driving and taking preventive steps to avoid accidents.