When you ask someone about their auto insurance coverage often times their response to “What sort of coverage do you have?” will be “full-coverage”. However, there really is no such thing as “full-coverage”. What is inferred by the wording “full-coverage” is that they are covered in the event that they are in an accident and are at fault, but that doesn’t necessarily mean your car is fully covered in other instances. So, today we will take a moment to break down a few things that are important to know about your auto coverage. This is a simple breakdown, so if after reading this you have questions or need to know your specific coverage; we suggest that you contact your insurance agent to get a more in-depth explanation as it pertains specifically to your car and your policy.
Liability coverage is typically the state minimum coverage that is required for a driver to possess on their vehicle. Liability coverage does not cover your vehicle in an accident. Liability auto insurance covers damages sustained to a vehicle “not at fault” in the accident. In other words, if you hit another vehicle with your vehicle (and the accident was deemed your fault), your liability coverage would pay to repair the other driver’s vehicle. However, liability auto insurance does not protect your vehicle even if you were deemed not at fault in the accident. In such an instance, the other driver’s insurance should cover your repairs (assuming they have insurance). In no fault accidents or in the event the at-fault driver did not have auto coverage, liability insurance will not protect you or pay to have your vehicle repaired.
The idea of “full-coverage” could give the indication that in the event you are at fault in an accident the other vehicle driver and their car will be covered as well as yours. This is the case if you have accident coverage beyond just deductible as required by law. However, this still wouldn’t really be “full-coverage” in that you will be required to pay a portion of the repair costs if the accident repairs are being paid for through your auto policy. This shared cost amount is referred to as the deductible. The deductible is the amount you set up when you purchased your policy through your insurance company. While the amount can be set at a number of options at the time of purchase, typically we see $250, $500, and $1,000 as the most common deductible amounts. The deductible is similar to co-pays when you go to the doctor in that you pay your deductible amount for the repair, while the insurance company pays the remainder of the repair costs.
Another thing to consider when looking at your coverage is comprehensive and collision. It is possible to be covered for one and not the other. Collision coverage covers accidents such as if you hit another car, tree, curb, etc. Comprehensive covers things like hail damage, tree limbs falling on your vehicle, a deer running into your car, vandalism, theft, etc. With storm season still upon us, if you are unsure if you have comprehensive coverage now would be the time to contact your agent and check. Additionally, your deductible for comprehensive can differ from the deductible set on your collision coverage so you may want to check that out as well.
Lastly, there are riders you can have added to your policy such as medical and no-fault coverage. Your agent can go over the benefits of such additional coverage options and amounts. However, optional coverage we highly recommend you add to your policy are auto rental coverage and road side assistance. Both of these options add very little in the way of your overall premium costs monthly, but can save you a lot of money when you have an emergency or need a vehicle to drive while yours is being repaired.
It is important to understand your policies – what is covered; what is not! If you are unsure about yours, contact your insurance agent and ask. If you find there are holes in your coverage, they will be able to help you take care of those holes now. This is always better than finding out after you need the coverage that you did not have it. Additionally, its always good to check with your agent once a year to ensure nothing has changed from when you originally purchased your policy. Perhaps you chose to forgo rental coverage on your policy when you originally purchased it 4 years ago because you had an ‘spare’ car. However, since that time you sold the ‘spare’ car. Your agent is there to help you protect your assets and ensure you are adequately covered for life’s most common incidents. Keep that in mind and utilize them for advice – its what they are there for!