Is Full Coverage Really Full Coverage?
Oftentimes in my career, I’ve encountered individuals that were unfortunately injured in a motor vehicle collision. This type of situation almost always necessitates trying to navigate the world of insurance coverage that can provide much needed resources and help to individuals that require medical treatment or cannot work because of injuries they sustained in a car crash. And most often, when I pose the question to an injured individual about their car insurance and what type of coverage they had I get a response along the lines of “I have full coverage”. But once we obtain that person’s actual insurance policy, we often discover that what they might have been told about “full coverage” turns out to be anything but “full”. So what does “full coverage” actually mean and what do you need to know to make sure you have “full coverage”? Please read on to find out.
Auto insurers provide different types of coverage for different types of losses in a motor vehicle collision, and those types of coverage are usually available for all drivers to purchase. But even though the types of coverage might be different, these coverages all have the same general purpose – that is to protect you and your family’s assets in the event that disaster strikes in the form of a car crash). So let’s talk about the different types of insurance that would constitute what I would consider to be “full coverage”. There are 4 main categories.
The first type of coverage is commonly termed liability coverage. Liability coverage provides payment to another person if you violate the rules of the road and damage their vehicle or any of the vehicle’s occupants. Liability coverage can provide money to the damaged party and hopefully in an amount that is sufficient to prevent the damaged party from coming after your individual assets like your home, car, or other valuable property. Liability coverage is paramount for all drivers and this is the coverage that all drivers are required by law to carry in order to drive a motor vehicle in the first place.
Right beneath liability coverage, there exists a second type of coverage called underinsured/uninsured motorist coverage. Unlike liability coverage, that pays another injured party, underinsured/uninsured motorist coverage pays you if you are injured or your vehicle is damaged by the fault of another person that doesn’t carry any or not enough insurance to put you back in the position you were in before a crash. Underinsured/uninsured motorist coverage can also serve to protect your personal assets by providing you with money for medical bills, pain, annoyance, inconvenience and property losses that you would otherwise have to come out-of-pocket to cover in the wake of being injured in a car crash.
Having liability and underinsured/uninsured motorist coverage goes a massively long way towards having what I would consider to be “full coverage” for a car crash, but there are two other types of coverage that I would also include under the “full coverage” category as well. These are rental car coverage, if your vehicle is disabled from a crash, and medical payments coverage, which like health insurance, provides coverage for medical expenses to treat collision-caused injuries.
Having all 4 of these coverages would widely be considered as having “full coverage”, but there are a couple of additional coverages that are also worth mentioning. The first of these is commonly termed “gap” coverage. Gap policies can make up the difference on a total loss of your vehicle where you’re “upside down” in terms of what is still owed on the vehicle versus what the “blue book” payout value would be in the event of a total loss of the crashed vehicle. And finally, there is “umbrella coverage”. Umbrella coverage is a type of liability coverage provides an additional amount of money for another person if you damage their vehicle or person in a car crash over and beyond the amount of the liability coverage on your automobile policy.
Getting “full coverage” on your vehicle is a very wise decision to make to protect your and your family’s assets. Beyond the required liability coverage, the uninsured/underinsured motorist coverage can be particularly helpful for people that are seriously injured by a driver carrying state-mandated minimum coverage, which is often not enough to cover more than light injuries and damages. If you’re interested in getting “full coverage” on your vehicle, I’d urge you to speak with your insurance agent about these various types of coverage and explore your options with your agent for obtaining the same. Safe travels in the meantime.