Debunking the Myth of ‘Full Coverage’: What You’re Really Getting in Your Auto Insurance

Summary

This blog explains the often misunderstood term "full coverage" in auto insurance. It breaks down what full coverage typically includes—liability, comprehensive, and collision insurance—while highlighting what it doesn't cover, such as deductibles and additional protections. The article advises readers to assess their personal needs and consult with an insurance agent to determine the best coverage for their situation.

What is “Full Coverage”, Really?

When people ask for “full coverage” auto insurance, they often think it means their car is covered for anything and everything. But the term “full coverage” is more of a common phrase than a specific insurance product. Understanding what it really includes can help you make better decisions about your insurance needs.

Breaking Down Full Coverage

Typically, when people refer to “full coverage,” they’re talking about a combination of two key types of insurance:

1. Liability Insurance: This is the foundation of any auto insurance policy. It covers the costs if you’re responsible for an accident that injures someone else or damages their property. This coverage is often required by law.
   • Example you hit a car – you would be responsible for the property damage on the other vehicle and any bodily injury to the other drivers.
   • Often you see coverage listed as 25/50, 100/300, or 250/500. This is saying you have $250,000 of coverage per person in an accident or $500,000 maximum per accident if there was multiple people involved.
   • Why is this coverage important? – if you cause an accident and don’t have enough coverage. The other party can come after your assets to make up for the damages.
   • Do you have more than $500,000 in assets, maybe it is time to talk about an umbrella policy?
2. Comprehensive and Collision Coverage:
   • Collision: This covers damage to your car resulting from a collision with another vehicle or object, regardless of who’s at fault.
   • Comprehensive: This covers your car for non-collision-related incidents like theft, vandalism, fire, or damage from natural disasters like hail.

Together, these make up what many consider to be “full coverage.” However, it’s important to know that “full coverage” doesn’t mean your insurance covers everything.

What “Full Coverage” Doesn’t Cover

While “full coverage” can protect you from many situations, it’s not a catch-all. Here are some things it typically doesn’t include:

• Deductibles: You’ll need to pay your deductible before insurance kicks in for collision or comprehensive claims.
• Uninsured/Underinsured Motorist Coverage – for bodily injury and property damage: This helps if you’re hit by someone without enough insurance. It’s not always included in “full coverage.”
• Medical Payments/Personal Injury Protection: Covers medical expenses after an accident. This is a separate add-on.
• Extras: Rental car coverage, roadside assistance, glass coverage, and other extras often need to be added separately.

What Coverage is Right for You?

Deciding what coverage you need depends on your personal situation. If you have a newer or more valuable car, some of these extra coverages might be a good idea. But if your car is older, the cost of these extra coverages might outweigh the potential benefits. If you have a lot of assets to protect you might want to consider higher liability limits.

The best approach is to understand your risks and talk with our team about what coverage makes sense for you. Call us today 720-807-9212 or schedule a review.

Remember, “full coverage” can provide peace of mind, but it’s crucial to know exactly what you’re getting—and what you might be missing.

Not sure what coverage you have? You can access your policy documents 24/7 through our client login.