Conscientious drivers often look for "full coverage" car insurance policies. But despite the prevalence of the term, "full coverage" doesn't fully cover everything. We'll explain.
what is “full coverage”?
"Full coverage" isn't a coverage in itself. It's a phrase generally used to designate a number of coverages that provide a good amount of protection: specifically liability, comprehensive, and collision coverages.
Liability helps pay for damage you cause in an at-fault accident, while comprehensive and collision can help repair damage to your car (or replace it altogether).
It's a robust package of protection, yes — but it might not provide all the protection you need. And that's why "full coverage" can be misleading.
what “full coverage” doesn’t include
Car insurance companies offer a bunch of coverage types that fall outside the domain of "full coverage," and many are worth considering.
Let's take a quick look at a handful of coverages that tend to fall outside of "full coverage":
- Medical payments coverage — This coverage can help pay post-accident medical expenses for you and your passengers regardless of fault, and it can also step in if you exceed your health insurance limits.
- Uninsured/underinsured motorist coverage (UM/UIM) — UM/UIM coverage helps pay for bills that the other driver's policy should have taken care of, but can't because of that driver's low coverage limits or lack of coverage altogether.
- Emergency road service coverage (aka roadside assistance or towing and labor) — A handy coverage to have if you're not a whiz with a jack and a wrench or just need to get a wrecked car to the shop.
- Customized parts and equipment coverage — If you're the kind of driver who likes a custom sound system and chrome rims, "full coverage" won't help you replace or repair them after an accident — but this coverage can.
- Rental car coverage — This can reimburse your rental car expenses after a covered accident.
- Gap coverage (aka auto loan/lease coverage) — If you've financed your car, gap coverage exists to help you pay off your auto loan if your car's totaled when you still owe more than it's worth.
“full coverage” is really more like “very good coverage”
Though full coverage provides a good amount of protection in terms of liability and the well-being of your car, it doesn't mean that you won't have to pay anything out of pocket after an accident.
If you opt for a "full coverage" policy, you'll be covered up to the limits you select. If damage exceeds your liability limits, you could be legally liable for the difference (a good argument for higher limits).
Keep in mind, too, that any time your comprehensive or collision coverage kicks in, you'll also need to pay the deductible.
you may need more than “full coverage”
If you're in the market for a new car insurance policy and you're looking for maximum protection, consider all of your coverage options above and beyond what "full coverage" typically includes.
The general rule of thumb: buy as much coverage as you can comfortably afford.
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