9.6 Uninsured and Underinsured Motorist Coverage in Florida

1. Part C: Uninsured / Underinsured Motorist (UM/UIM) Coverage (F.S. § 627.727)

Uninsured/Underinsured Motorist (UM/UIM) coverage is one of the most litigated and critical coverages in Florida. Under F.S. § 627.727, UM coverage compensates an insured for bodily injury damages (including medical bills, lost wages, and non-economic pain and suffering) that the insured is legally entitled to recover from the owner or operator of an uninsured, underinsured, or hit-and-run motor vehicle.

Key Distinction: UM Covers Bodily Injury, NOT Property Damage!

In Florida, statutory UM coverage under F.S. § 627.727 applies strictly to bodily injury. It does not pay for physical damage to the insured's vehicle. Vehicle damage caused by an uninsured driver is handled under Part D Collision coverage.

Mandatory Offer and Written Rejection Rule

Whenever an insurer issues a policy delivering Bodily Injury Liability (BIL) coverage in Florida, the insurer is statutorily required to offer UM coverage with limits equal to the policy's bodily injury liability limits.

• The insured has the legal right to reject UM coverage entirely or select lower limits.
• However, under F.S. § 627.727(1), any rejection or selection of lower limits MUST be executed in writing on an official form approved by the OIR and signed by the named insured.
• If the insurer fails to obtain a properly signed written rejection form, UM coverage is statutorily reformed by operation of law to equal the policy's bodily injury liability limits!

Stacking vs. Non-Stacking UM Coverage

Florida is a "stacking" state. Under F.S. § 627.727, insurers must provide Stacking UM unless the insured specifically elects Non-Stacking UM in writing.

                             STACKING VS. NON-STACKING UM
                                          │
         ┌────────────────────────────────┴────────────────────────────────┐
         ▼                                                                 ▼
    STACKING UM (STATUTORY DEFAULT)                                 NON-STACKING UM (BY ELECTION)
• Combines limits across ALL vehicles                            • Single vehicle limit applies strictly
• Example: 3 cars @ 50/100 = $150k/$300k limit                   • Example: 3 cars @ 50/100 = $50k/$100k limit
• Applies if injured in own car, friend's                        • Lower premium, must be elected in writing
  car, or as a pedestrian                                        • Eliminates inter-policy limit stacking

1. Stacking UM (The Florida Default)

Stacking allows the insured to add together (stack) the UM limits for every vehicle insured under the policy (or across multiple household policies).

• How It Works: If an insured owns three vehicles on a policy with 50/100 Stacking UM ($50,000 per person / $100,000 per accident), the total available UM coverage for an accident is multiplied by three: $150,000 per person / $300,000 per accident.
• Broad Protection: Stacking UM follows the insured everywhere. It applies whether the insured is driving any of their own covered autos, riding as a passenger in a friend's car, driving a rental car, or walking as a pedestrian.

2. Non-Stacking UM (Available for Reduced Premium)

Under F.S. § 627.727(9), insurers may offer non-stacking UM coverage at a reduced premium rate, provided the insured signs the approved non-stacking election form.

• How It Works: The coverage limit is strictly confined to the limit of the single vehicle involved in the crash. In the 3-car scenario above with 50/100 Non-Stacking UM, the maximum available coverage is strictly $50,000 per person / $100,000 per accident.
• Non-Owned Auto / Pedestrian Rule: If the insured is injured while riding in a non-owned vehicle or as a pedestrian, non-stacking UM provides coverage only up to the highest single limit on any one vehicle insured on their policy.

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Summary Comparison: Florida Auto Liability & Coverage Spectrum

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3. The Rejection Form and Its Conclusive Effect

Because uninsured motorist coverage is mandatory unless rejected, the paperwork is what carriers litigate. F.S. § 627.727(1) requires the rejection to be made on a form approved by the Office of Insurance Regulation, containing a statement in 12-point bold type advising the applicant that "you are electing not to purchase certain valuable coverage which protects you and your family." When the named insured signs that approved form, the statute creates a conclusive presumption of an informed, knowing rejection on behalf of all insureds.

Three consequences follow for the adjuster:

• A missing or non-conforming form defeats the rejection. If the carrier cannot produce a properly executed approved form, uninsured motorist coverage is read into the policy at limits equal to the bodily injury liability limits.
• Only the named insured may sign. A rejection signed by a spouse who is not a named insured, or by an agent, does not bind the household.
• Lower limits require the same formality. Selecting limits below the bodily injury limits is a partial rejection and needs the approved form as well. Standard uninsured motorist limits may not exceed the bodily injury limits the insured purchased.

4. Settling With the Tortfeasor Without Destroying UM Coverage

F.S. § 627.727(6) governs the moment that ends most underinsured motorist claims badly. Before accepting a settlement offer from the liability carrier, the injured person must give written notice of the proposed settlement to every uninsured motorist insurer. The uninsured motorist insurer then has 30 days to choose between two outcomes:

1. Authorize the settlement, which releases the tortfeasor and leaves the underinsured motorist claim intact for the excess.
2. Preserve its subrogation rights against the tortfeasor by paying the injured party the amount of the written settlement offer within the 30-day window.

An insured who signs a release without giving that notice can extinguish the carrier's subrogation right and, with it, the underinsured motorist claim. An adjuster who receives a § 627.727(6) notice must diary the 30 days immediately; silence is authorization.

Class I and Class II insureds. Florida case law sorts uninsured motorist claimants into Class I — the named insured and resident relatives, who carry the coverage with them in any vehicle and on foot — and Class II — permissive users, passengers and other occupants, who have coverage only while occupying the insured vehicle. The distinction decides both who may claim and, on a stacked policy, how much is available.