The Myth of Full Coverage Car Insurance

Many people purchase automobile insurance believing that they are buying “full coverage” for any liability or damages they may incur while driving their car. Unfortunately, there is no insurance policy that is actually called “full coverage.” That’s because there is no such thing as a policy that provides what most people would consider full coverage. Purchasing “full coverage” insurance often can result in overpaying for insurance that provides no more coverage than policies that cost much less yet protect you just as much as a more expensive policy. Making the assumption that a “full coverage” plan will compensate you for any damages you incur is risky. It might actually result signing up for a plan that actually doesn’t cover you in the way you thought it would.

What is “full coverage?”

“Full coverage,” unfortunately, is not a coverage at all. The phrase is often used to describe policies that cover liability, comprehension, and collision coverages. Liability coverage will pay for damage you cause in an accident where you are at fault – or at least pay for some of that damage. Comprehensive and collision coverage will pay for damage to your car or the cost of replacing your car if it the vehicle suffers enough damage to render it a total loss.

Once again, these coverages really only pay for part of the damage or replacement cost. You still will be responsible for paying the deductible – the amount you have to pay before the insurance company begins to cover the costs of an accident – and your coverage is restricted by the limits of coverage that you select when buying a policy. If your damages exceed your coverage limits, you will be paying those excess costs out of pocket.

“Full coverage” is better described as “pretty good coverage.” There are many things a “full coverage” policy that covers liability, comprehensive, and collision nonetheless will not cover. These coverages can include:

• Medical payments: coverage for medical expenses suffered by you or your passengers in an accident, no matter who was at fault.
• Uninsured or underinsured motorist coverage: this option pays expenses that the at-fault driver’s policy should cover but doesn’t because their limits were too low or they had no insurance at all.
• Roadside service: this self-explanatory coverage is for towing, tire changing, and the like.
• Customized parts and equipment: If you have modified up your car with custom rims, a neighborhood-shaking sound system, or other such specializations, you might want this coverage. Full coverage doesn’t provide it.
• Rental car coverage.
• Gap coverage: This pays the difference between what you owe on your car and what your insurance company is willing to pay when the car is totaled.

The coverages you select, the coverage limits you choose, and the deductible level you select all affect the cost of your insurance. Depending on your insurance needs, you might want special coverages, higher coverage limits, and a lower deductible. If you are more price-sensitive, you might opt for a plan that offers less coverage. It is important to make an informed choice, however, and an insurance salesperson working on commission might be more interested in selling the largest insurance policy rather than meeting your actual needs.

Contact The Law Office of Gary A. Peterson

An experienced Tustin car accident attorney can help you determine the amount of insurance that is right for you. You can reach me at (714) 461-6003 or through my online contact form.