Auto insurance can be mysterious. Vague and misleading legal terms tend to confuse purchasers." Full Coverage" is a term that gets used a lot, but what does it really mean?
Levels of insurance coverage:
A combination of many different types of policies/coverage works out to be what is sold as "full coverage." Individual items listed below make up what is commonly referred to as a full coverage policy:
State Required Liability or No-Fault Insurance Coverage:
helps cover bodily injury and property damages to others in an accident that you caused
Property Damage:
This covers the damage you cause to another's vehicle
Collision Coverage:
This coverage helps pay for the damages to your vehicle even if you are at fault for the accident.
Comprehensive Coverage:
helps cover damages that were NOT the result of an accident, like vandalism or theft.
Uninsured Motorist Protection:
helps you cover costs when you get hit by a driver with no insurance
Underinsured Motorist Protection:
helps cover your costs when you get hit by a driver with insufficient insurance
Medical Payments Coverage:
helps cover your medical bills after an accident
Rental Reimbursement:
helps cover rental costs when your car is not functioning
Emergency Road Service:
helps cover the costs of towing and labor
The biggest mistake I see made regularly with those purchasing auto insurance is that the consumer feels protected if they have so called "full coverage." But just because one has full coverage does not necessarily mean you are safely protected.
