What Does Full Coverage Car Insurance Cover?
A tree fell on your new car during a heavy storm, and now it’s a wreck. You need a tow truck and a rental, plus your car must be repaired or replaced. Time to call the insurance company. Good thing you have full coverage car insurance, or do you?
Despite the popularity of the term, there is no such thing as full coverage car insurance. What’s typically being referred to is a policy with both liability and physical damage coverage. It can also describe a single policy that includes all possible coverages. Understanding what’s in your insurance policy is an important part of owning a car.
What’s Typically Covered?
What we commonly think of as full coverage is really a bundle of three distinct insurance options that offer the following protection:
- Liability Insurance: This form of insurance pays costs for the other party’s injuries and repairs when you’re at fault for an accident. You must have liability insurance before you can add comprehensive or collision coverage.
- Comprehensive Insurance: This pays for damage not caused by a collision, such as a falling tree, theft, flood, fire, hitting an animal or damage caused by weather. It can also cover windshield replacement. The coverage included in comprehensive insurance can vary so it’s a good idea to carefully review your car insurance policy.
- Collision Coverage Insurance: This pays for damage to your car when it collides with another vehicle, an object in the roadway, pothole, or flips over.
What’s Not Covered?
When you tell your insurance agent you want full coverage, it’s easy to assume you have every insurance coverage available. But many auto insurance options are not always included in policies. If you want to feel fully covered, consider adding these:
- Uninsured and Underinsured Motorist Insurance: This pays for your car repairs when the person who caused the accident cannot pay. This insurance is required in some states.
- Gap Insurance: This is important to have if you buy a new car. This coverage helps you pay off your auto loan if your car is totaled when you still owe more than it’s worth.
- Medical Payments Coverage: This helps with post-accident medical bills for you and your passengers no matter who is at fault.
- Emergency Road Service Coverage: This comes in handy when you need a tow or help fixing a flat.
- Rental Car Coverage: This coverage reimburses you for rental expenses when your car is out of commission from a covered accident.
- After-Market Equipment Coverage: This is important if you added extra electronics, expensive wheels, or other add-ons to your car. Most insurance only covers factory installed parts.
Is Full Coverage Required?
State laws don’t require you to have comprehensive or collision insurance. But if you lease or buy a new car, chances are your loan company will require a full coverage policy with a low deductible.
When Full Coverage Does Not Fully Cover You
Let’s say you caused an accident and the car you hit was a luxury sedan. Two of the passengers were transported to the hospital with life-threatening injuries. After the accident, you may find that you have the right type of insurance, just not enough of it.
When you choose a full coverage insurance plan, your policy will automatically be set to the minimum amount required, which varies from state to state. Most insurance policies express the amounts covered like this, for example: 25/50/25 ($25,000/$50,000/$25,000). The numbers correspond to the maximum amount for each personal injury claim, the maximum amount for all personal injury claims in one accident, and the maximum property damages for one accident.
In the above scenario, it’s easy to see how $25,000 would not cover emergency services for a seriously injured person, or be enough to replace a totaled luxury sedan. The injured party’s attorney may demand you pay the difference between what your policy covered and the actual damages. If you own a home or have a savings plan, you may want to review the amount of coverage in your policy to keep your assets secure.
Talk to an Attorney About Your Auto Insurance Coverage Issues
Understanding your auto insurance policy can be a challenge. If you're struggling with an existing car insurance claim or just want to make sure you're properly protected, it's a good idea to speak with an experienced car accident attorney in your area.
Contact a qualified auto accident attorney to make sure your rights are protected.