What Does “Full Coverage” Auto Insurance Really Mean?
April 7, 2016 in Car Accidents
When an auto insurance agent says they are getting you a “full coverage” policy, it’s easy to become complacent and assume that you are fully protected. But unfortunately, full coverage isn’t exactly what it sounds like. Here’s why you need to take a closer look at your auto insurance.
Full Coverage is Not a Meaningless Term
The term is everywhere, but the truth is that there is no clear definition for full coverage. It varies from company to company and even from policy to policy. Most people generally consider full coverage auto insurance to include:
- Collision coverage (for damages to your car in an accident)
- Comprehensive coverage (for other non-accident damages, such as vandalism and theft)
- Liability coverage (for injury and property damages from an accident in which you are at fault)
Nevertheless, you should always read your policy carefully so you know what’s included and what’s not. Perhaps the biggest pitfall of full coverage auto insurance is that it has little to do with your policy limits, which are pivotal in the case of a serious accident.
Other Types of Coverage You Might Need
Collision, comprehensive, and liability coverage are by no means “full coverage.” There are many other types of coverage that can be added to your policy to provide additional peace of mind, such as:
- Medical payments coverage
- Uninsured/underinsured motorist coverage
- Roadside assistance
- Rental reimbursement
- Guaranteed auto protection (GAP) coverage
Medical Payments Coverage: Why You Should Consider It
We’re not going to tell you that you need to go and add all of the items listed above, although having a buffered policy is never a bad thing. To start, consider adding medical payments coverage. This allows you to be immediately reimbursed for any out-of-pocket medical expenses that result from an accident, even if you are at fault. Medical payments coverage can also help mitigate any deductible or co-payments you might pay through your health insurance.
Uninsured/Underinsured Motorist Coverage: Why You Absolutely Need It
Roughly 3.5 million California drivers have no auto insurance. Millions more carry the bare minimum and are considered underinsured. If you get in an accident with an uninsured or underinsured driver, you could be left uncompensated for injuries and damages if you do not have sufficient uninsured/underinsured motorist coverage (UM/UIM).
To be adequately covered, you must start by purchasing high liability limits, as the State of California does not allow for a motorist’s UM/UIM coverage to be higher than his or her liability coverage. Then, ensure that your UM/UIM limits are just as high as your bodily injury liability coverage. Compared to your liability coverage, UM/UIM coverage is relatively inexpensive.
The correct amount of coverage will vary based on individual circumstances, but we usually recommend UM/UIM limits of at least $250,000 per person/$500,000 per incident.
If You Are in an Accident
Once you have confirmed your auto coverage, you can drive with better peace of mind knowing that you are truly covered. If you are ever in an accident in which you feel you might have a case for a personal injury claim, do not wait to contact an attorney. Read our previous article here to learn why.