Full Coverage Auto Insurance Myth
Many think they carry “full coverage” on their car insurance policy; however, in reality there is no such thing as full coverage auto insurance. A full coverage policy is typically one that includes several types of car insurance coverage that, as a whole, provide a solid level of protection in case of an accident.
What Does “Full Coverage” Mean?
While there is no car insurance coverage that goes by the name “full coverage,” most individuals think of full coverage as a policy that combines the following:
- State-required liability or no-fault insurance coverage to cover bodily injury and property damages to others in an accident you cause.
- Collision coverage to pay for damages to your vehicle in the event of an accident.
- Comprehensive coverage, which is designed to cover vandalism, theft, and other damages that are not the result of an accident.
Even with this, the details and amount of protection will vary by the company issuing the policy. You need to ask about the details and read the fine print carefully.
Additional Coverages to Consider
Instead of relying on a “full coverage” policy, ask yourself what coverage and limits best meet your needs. There are numerous other types of car insurance coverage that will offer you additional protection in case of an accident or other unfortunate situation.
- Uninsured/ Underinsured Motorist Protection – This helps you cover your costs if you get hit by a driver with no insurance or insufficient insurance coverage.
- Medical Payments Coverage – You can use this coverage to pay for your medical costs after a car accident, even if you were at fault.
- Rental Reimbursement – If you’re in an accident and your car is in repair, this coverage can cover your rental costs while you wait.
- Emergency Road Service – You can use this coverage if your car breaks down on the road and you need towing or labor.
- Customized Parts and Equipment – If you’ve enhanced your vehicle with expensive equipment, this coverage will help you with the cost of damages to your custom parts.
- Gap Insurance – If your car is totaled in an accident, this coverage helps pay the balance between the amount you owe on your loan or lease and the car’s estimated actual cash value.
Different Policy Coverages
Bodily Injury Liability (BI) Coverage: pays for death or serious and permanent injury to others when you are legally liable for those damages. If an insured is sued, the insurance company can provide legal representation.
Property Damage Liability (PD) Coverage: pays for damages that an insured is legally liable for resulting in the physical damage to, or destruction of, tangible property of another, including loss of use. If an insured is sued, the insurance company can provide legal representation. Florida law requires a minimum of $10,000 in this coverage.
Personal Injury Protection (PIP) Coverage: pays 80 percent of all necessary and reasonable medical expenses incurred as a result of a covered injury, regardless of who caused the accident. This includes medically necessary medical, surgical, x-ray, dental, and rehabilitative services, including prosthetic devices and medically necessary ambulance, hospital, and nursing services. Individuals must receive initial services and care within 14-days after the motor vehicle accident and payment is contingent on the covered person being diagnosed with an emergency medical injury. PIP also pays 60 percent of work loss and a $5,000 death benefit.
Uninsured/Underinsured Motorist (UM) Coverage: pays for an accidental bodily injury, sickness, or disease, including death, when such an injury is the result of an automobile accident and the at-fault party does not have Bodily Injury (BI) Coverage or has liability limits lower than what is needed.
Medical Payments (Med Pay) Coverage: pays reasonable expenses for necessary medical and funeral services due to a bodily injury or death sustained in an automobile accident, regardless of fault.
Comprehensive or Other than Collision Coverage: pays for damage to a vehicle from incidents other than a collision including: fire, theft, windstorm, vandalism or flood. It also covers damages caused by falling objects or from hitting an animal.
Collision Coverage: pays for repair or the actual cash value of the insured’s vehicle if it collides with another vehicle, flips over, or crashes into an object (except animals), regardless of who causes the accident.
Towing & Labor Coverage: provides coverage for emergency road service (at the scene) and towing up to the limits shown on the policy.
Rental Reimbursement: provides reimbursement for automobile rental up to a specified limit shown on the policy. It applies if the insured gets into an accident with their own automobile and can no longer drive it, and usually if the auto is stolen. Some insurance companies will have the insured rent/lease the replacement vehicle and then submit receipts for reimbursement.