Does your auto insurance policy provide full coverage? It depends. Because when it comes to auto policies, “full coverage” is a bit of a misnomer. The term generally applies to a policy with liability, comprehensive, and collision coverages—which together provide significant protection. But full coverage might not include all the protection you need. Several types of coverage fall outside that common definition.
Also, don’t assume that you’ll never have to fork over any of your own money, or that you’ll always have enough coverage to pay for all compensation demands. If you purchase collision and comprehensive (commonly considered part of full coverage), your chosen limits and deductibles are still in play. Selection of liability limits is always an important decision, as well.
So what’s a car owner to do? First, peruse the list of coverages below to see what’s available. Then pull out your policy declarations page to be sure you understand your coverage. Contact your agent if you have any questions.
Coverage for Others
Liability. Most states require drivers to carry a minimum amount of liability coverage to help pay for injuries or property damage to the other party in an accident they cause. The limits are typically stated as three numbers, such as 15/30/10. (The limits may be different in your state but expressed in the same manner; check with your insurance agent.) These numbers mean, in order, that your insurer will pay each injured party (other than you) up to $15,000 as compensation for his or her bodily injuries; up to a total limit of $30,000 for all bodily injuries (if multiple people are hurt); and up to $10,000 for property damage. It might be a good idea to consider higher limits, however, because medical costs and auto repairs can quickly add up.
Coverage for Me
Collision. If your car is damaged in a collision with another vehicle or an object, this coverage will pay for repairs, no matter who caused the crash. If repairing your vehicle would cost more than it’s worth, this coverage will pay its value. If you don’t select collision coverage and you are struck by an uninsured motorist, be aware that you will be responsible for the repairs. Keep in mind that about 13 percent of motorists nationwide are uninsured, according to the Insurance Research Council. Consider asking your agent about a separate line of coverage that can pay for damage to your car caused by an uninsured driver. Depending on the state, certain restrictions apply.
Comprehensive. This coverage pays for damage to your auto for losses that result from anything other than a collision—for example, theft or fire.
Rental Reimbursement. This coverage pays expenses you incur for using a rental car while your vehicle is being worked on. Dollar and day limits may apply.
Medical Payments Coverage/Excess Medical Payments Coverage. If you or your passengers are injured in an accident, this coverage can help pay for medical bills. Discuss the options with your agent.
Other Coverage to Consider
Uninsured (UM)/Underinsured Motorist (UIM). These coverages help compensate you and your passengers if you are in an accident with an at-fault driver who doesn’t carry any or enough liability insurance to cover your damage or medical expenses.