What Does Full Coverage Car Insurance Cover?

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What does a full coverage car insurance policy cover?
What are people really asking for when they request full coverage?
If full coverage car insurance isn’t a real option, then what kind of car insurance do I actually want?
How much will I pay if car insurance doesn’t fully cover me?
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What does a full coverage car insurance policy cover?

I just bought my first car, and now I’m in the process of shopping for the right insurance policy. I’m not sure exactly what kinds of coverage I need to get in order to cover everything, but I've heard of something called full coverage. What does full coverage car insurance cover?

Here’s the thing: “Full coverage” doesn’t really exist in the insurance world. It’s a loaded term with almost no meaning, and a total misnomer. Insurance agents can actually get sued when using that terminology, because it creates a false sense of security from feeling that your insurance policy would provide you with all the coverage you’d ever need. The term is completely inappropriate for things like liability coverage, especially.

What are people really asking for when they request full coverage?

I think people have been misled into believing that there’s one insurance policy that’ll take care of all of their needs 100%. When looking to create a sense of “full coverage,” what they’re probably really looking to do is assemble enough types of coverage to give them a feeling of real security and protection from all hypothetical scenarios.

While it’s true you can purchase several different types of car insurance to create a more complete sense of coverage, you can’t really achieve so much coverage that you’ll never have to pay anything in any scenario. You also can’t guarantee that you won’t ever run into a situation in which your insurance company denies coverage.

If full coverage car insurance isn’t a real option, then what kind of car insurance do I actually want?

That depends on your specific needs and concerns. To obtain a sense of having a more complete set of coverages, you’ll want to purchase several different kinds of car insurance.

The most basic car insurance policies come with these two main aspects of coverage:

  • Liability: This covers damage done to and by our vehicle. Liability coverage applies to both property damage and bodily injury. Property damage coverage will take care of expenses for damage done to vehicles or other property struck by your car, including legal fees if you are sued. Bodily injury coverage pays medical and legal fees for third parties injured in a wreck.
  • Medical payments: This coverage is designed to protect you and the other occupants of your car. If the driver injures themself or any occupants  riding with them at the time of an accident, medical payments coverage will take care of the fees.

However, you may purchase extra coverages to add to your policy to make it more complete. Many people shopping for that sense of “full coverage” end up tacking on many additional types of coverage.

Here are several standard add-on coverage options:

  • Collision: This type of coverage will take care of damage done to your car in the event of a collision with another car or another piece of property such as a telephone pole or tree. Coverage applies in the event that the collision is your fault.
  • Comprehensive: This coverage option will take care of damage to your car caused by things other than a collision, or elements considered to be beyond your control. This insurance covers damage done by natural disasters such as windstorms, hail, earthquakes, floods, and fires. It also covers theft or vandalism of your vehicle. Take note, however, that there’s one type of collision covered under comprehensive car insurance—collision with a deer.
  • Uninsured/underinsured motorist: This coverage will take care of fees resulting from a covered driver of your vehicle (e.g., you or a family member) getting into an accident with someone who doesn’t have sufficient coverage to reimburse you fully. This coverage also reimburses victims of hit-and-runs, and pedestrians who are struck by a driver without sufficient insurance.
  • Towing: This coverage will reimburse you for tow truck fees should your vehicle break down or get totaled.
  • Rental reimbursement: This coverage will reimburse you for rental car fees while your vehicle is being repaired after an accident.

Work closely with your independent insurance agent to assemble the proper types of car insurance coverage for you. Keep in mind things like your car’s age and value when reviewing available policies, and be careful when looking at their coverage limits and built-in deductibles.

How much will I pay if car insurance doesn’t fully cover me?

That depends entirely on your specific policy. Each of your coverage aspects comes with its own limit. These limits may be as low as each state’s legal minimums for insurance coverage, or you can purchase additional coverage up into the millions for each category. Keep in mind that each additional aspect of coverage you tack onto a basic policy will come with its own coverage limit, and probably its own deductible.

In the event of an accident or other mishap, your insurance will reimburse you for fees that reach your policy’s limit in that category. So if you have $10,000 in liability coverage, but cause $11,000 in property damage or bodily injury, you’ll be responsible for paying the remaining $1,000. How much coverage you purchase is up to you. It’s important to consider your specific needs when shopping for your policy.

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TrustedChoice.com Article | Reviewed by Paul Martin

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