Let’s say you’re shopping around for a new car insurance policy. It’s Saturday morning, you’re sipping a fresh cup of coffee, and all is well. You call the first insurance company on your list and say to the representative, I need a car insurance quote for full coverage.
The representative says, “Great. I can help you out with that. Before we get started, though, you should know there’s really no such thing as ‘full coverage’ so let’s talk about your actual insurance needs.”
What? Full coverage doesn’t exist? But…I’m sure I’ve had full coverage in the past!
Don’t fret just yet dear driver! Let us explain. Consumers, car dealers, agents, and companies toss the phrase “full coverage” around a lot, but what does it really mean? People who are shopping for insurance hear “full coverage” and might assume that they’ll be 100% covered no matter what happens to them and their car. It’s not true. Insurance policies always include limits, deductibles, and choices of coverage. Typically, “full coverage” is used to describe an auto insurance policy that includes only:
- The minimum state-required liability or no-fault insurance – This typically covers bodily and property damages in an accident you cause.
- Collision coverage – This coverage will pay for your vehicle to be repaired or replaced if it hits another object (like a tree or guardrail), if it overturns in an accident, or if it is hit by a “hit and run” driver.
- Comprehensive coverage – If your car is stolen or damaged in an event other than a collision (like a fire, rockslide, or other natural disaster), this coverage will pay for it to be repaired or replaced.
Notice this “full coverage” policy would not cover uninsured/underinsured motorist claims, damages that are higher than the state minimum limits, deductibles, or other optional coverages like medical payments coverage or Rental and Towing. And, in states like Florida it would likely not include bodily injury liability coverage.
Take the mystery out of “full coverage.” Don’t make assumptions about the coverage included in your policy. Be sure to talk to your agent or insurance company and ask questions to make sure you both understand what your insurance needs are and what your policy will cover, especially if either of you reference “full coverage” when talking.
Each driver has different insurance needs. It’s not likely that a student driver, mother of three, and military service member would have the same level and type of insurance coverage. They’re all in different places in life and would have an insurance policy to fit their circumstances.