a tree fell on his new car during a bad storm and now it’s a mess. you need a tow truck and a rental, plus your car needs to be repaired or replaced. time to call the insurance company. Good thing you have full coverage car insurance. or you?
Despite the popularity of the term, there is no such thing as full coverage auto insurance. What the phrase “comprehensive coverage” usually refers to is an insurance policy with liability and physical damage coverage. it can also describe a single policy that includes all possible coverages. Understanding exactly what your policy covers is an important part of owning a car.
Reading: Full coverage insurance covers what
what is usually covered?
What people often think of as full coverage is actually a set of three different insurance options that offer the following protection:
- Liability Insurance: Insurance that pays the costs of another party’s injuries and repairs when you are at fault in an accident. you must have liability insurance before you can add comprehensive or collision coverage.
- Comprehensive Insurance: Insurance that pays for non-collision damage such as falling tree, theft, flood, fire, hitting an animal, or weather damage. can also cover windshield replacement. The coverage included in comprehensive insurance can vary, so it’s a good idea to review your auto insurance policy carefully.
- Collision Coverage Insurance: Insurance that pays for damage to your car when it collides with another vehicle, an object on the road, hits a pothole, or rolls over.
- Uninsured/Underinsured Motorist Insurance – This coverage pays for repairs to your car when the person who caused the accident is unable to pay. this insurance is required in some states.
- gap insurance: This coverage is worth it if you buy a new car. gap insurance helps you pay off your car loan if your car is totaled when you still owe more than it’s worth.
- Medical Payments Coverage: This coverage helps with post-accident medical bills for you and your passengers, no matter who is at fault.
- Emergency Roadside Service Coverage: This coverage is helpful when you’re stranded and need a tow or to fix a flat tire.
- Rental Car Coverage: This coverage reimburses you for rental expenses when your car is out of service due to a covered accident.
- Aftermarket Equipment Coverage: This coverage is important if you added extra electronics, expensive wheels, or other modifications to your car; most insurance only covers factory installed parts.
what is not covered?
When you tell your insurance agent you want comprehensive coverage, it’s easy to assume you have all the insurance coverage available. But many auto insurance options aren’t always included in policies. if you want to be completely covered, consider adding these:
is full coverage required?
State law does not require you to have comprehensive or collision insurance. But if you lease or buy a new car, your loan company may require a full coverage policy with a low deductible.
when full coverage doesn’t fully cover you
Imagine 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 kind of insurance, but not enough.
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: 25/50/25 ($25,000/$50,000/$25,000). the numbers are for 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 scenario above, it’s easy to see how $25,000 would not cover emergency services for a seriously injured person, nor would it be enough to replace a destroyed luxury sedan. the injured party’s attorney may require you to pay the difference between what your policy covers and the actual damages. If you own a home or have a savings plan, you may want to review your policy coverage amount to keep your assets safe from court judgments that may exceed your insurance policy limits.
Talk to a lawyer about your auto insurance coverage issues
Understanding your auto insurance policy can be challenging. If you’re having trouble 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.