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What is "Full Coverage" Auto Insurance?

We hear this term like a broken record in our agency so we have decided to write an article on the MYTHS and TRUTHS of “Full Coverage”.

Let me just start out by letting you know that “Full Coverage” does not exist! You’re probably thinking to yourself right now, wait but I have Full Coverage, don’t I? The answer is and always will be NO! No one has or has ever had “Full Coverage” because there is truly no such thing as “Full Coverage”.

  1. Myth: Full Coverage means anyone can drive my car and be covered.
    Truth: Generally, they are covered to drive your vehicle if you have given them permission to drive your vehicle and;
    1. They do not have regular access to your vehicle.
    2. They do not drive your vehicle on a regular basis.
    3. They do not live in your household.
    4. They are not excluded from your policy.

    If you have answered yes, to any question a-d, we recommend that you check with your insurance agent about your policy, they may need to be added as a listed driver to be covered. As you can see this is not clear cut and you should always use good judgement and common sense when loaning out your vehicle. As, I always tell my customers, when you loan your vehicle, you are loaning your insurance. And if your policy must pay a claim for a non-listed driver, you can expect some future consequences to your policy such as possible, Non-Renewal or Rate Increases.

  2. Myth: Full Coverage means it covers EVERYTHING! I mean it’s Full Coverage, right??
    Truth: WRONG!! I Believe Full Coverage to be a made-up term, created by banks or other creditors to create a layman’s term for Comprehensive and Collision. Hence if you look up Full Coverage in any true insurance glossary, you will not find it!

    So, what does Full Coverage mean to me? All It means is you have just enough coverage to satisfy your Lienholder, (Legal owner of your vehicle). This can be as minimal as, Comprehensive and Collision only, and can usually have deductibles as high as $1,000. No other coverage is required to satisfy the banks insurance requirements of your loan. What Coverages does your Lienholder NOT require?

    1. Liability Insurance - Sure its required by the State of Washington, however some policies may not include liability at all. We recommend buying the most liability insurance you can afford. Liability Insurance covers any legally, enforceable obligation typically this is damage or injuries to a 3 rd party.
    2. Uninsured Motorist Bodily Injury and Property Damage - This is an additional layer of protection in the case your property is damaged and/or you are injured by a vehicle that has none or not enough liability protection.
    3. Personal Injury Protection - Also known as PIP coverage, this is an additional layer of protection for you, and other passengers of your vehicle. Fault does not matter for this coverage to apply. Typically, any medical treatment deemed necessary will be covered up to your policy limit. PIP also includes limited coverage for wage loss, essential services and funeral expense.
    4. Roadside Assistance and Rental Car Coverage– Many people incorrectly assume these two coverages are automatically included in what they believed was “Full Coverage”. Make sure to ask your agent to add these coverages to your policy should you want your auto insurance to cover your tow bill after a mechanical breakdown or provide you a rental vehicle after a covered claim, such as a collision or comprehensive loss.
    5. Many policies have more options than meets the eye. Other coverages to consider may include, Medical Payments, Loan or Lease Gap Coverage, Custom Equipment Coverage, OEM Parts coverage, New Car Replacement and Umbrella or Excess Liability Policies.

As you can see “Full Coverage” is not a real option. We recommend you become educated on what your policy really covers. We encourage you to call and ask your current agent to explain “Full Coverage”. If your agent is not able to clearly explain and address these myths it’s time to consider a second option. Should you want a comparison of coverage please call, email or connect with us online today!

Author
Casey McKinney
Owner at Yakima Valley Insurance