What is Full Coverage Insurance?

Full Coverage is a term used by many which makes me wince each time I hear it.

Why? What does full coverage mean? To most who use the term, I fear they believe that it means anything that happens to them or their car is covered.

As a licensed Insurance Agent, I know there is no such coverage.

All coverage has a deductible, a limit, or worse – exclusions.  So where did the term come from then if there is no such coverage? And more importantly, what is covered?

My best guess, is those who carry full coverage insurance believe that they have coverage for damage to their vehicle (physical damage coverage as insurance professionals say), liability insurance, and coverage for anything else that might happen to their person or their vehicle. Unfortunately, this isn’t (always) the case, and coverage varies widely from plan to plan, meaning that it’s still a far cry from the “full coverage” that people may believe that they have.

So if “full coverage” auto insurance doesn’t cover absolutely everything, what does it cover?

Well, let’s start with state minimums.  In order to receive an insurance card (or evidence of insurance) you must carry a minimum $35,000 in liability coverage and $5,000 in Medical Payments (Med Pay, as it’s often called). Simply put, liability insurance covers others, and Med pay covers your medical bills from an auto accident.  

Many understand the risk of not carrying enough liability insurance, but a common question I get on Med Pay is: “Why do I have to carry medical insurance when I have my own medical?”

In Pennsylvania, if you are injured in an automobile accident it must be paid by your insurance company.  In fact, you have to provide proof that your Med Pay has been exhausted on your auto policy before other coverage will pay. Like liability insurance, there are reasons you may want to increase the limit as well. In addition, there are a number of optional coverages you may want to consider.  

But what about damage to your vehicle? That’s what you really wanted to know anyway right?

Your vehicle is covered by collision or comprehensive which are 2 different coverages (with potentially different deductibles). These coverages are optional unless you finance your car. So, let’s be honest, the bottom line is that Insurance is a lot more complicated than catchy phrases, monthly payments, and cute commercials.

If you’d like help understanding insurance coverage, myself or our licensed Insurance professionals on staff are ready to help you get the right coverage at the right price.

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