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The Dangerous Myth of "Full Coverage" Insurance

When it comes to purchasing auto insurance, the term "full coverage" is both commonly used and, in our opinions, highly misleading. Many assume that being "fully covered" means complete protection against all possible liabilities encountered on the road. However, the reality of many insurance plans sold as “full coverage” can leave you under-insured and vulnerable when you least expect it.

The Illusion of "Full Coverage"

"Full coverage" is not a standardized term within the insurance industry. It generally refers to a policy that includes liability coverage, along with collision and comprehensive insurance. Liability coverage pays for the damage you do to others or their property, while collision and comprehensive coverage protect your vehicle from damage. At first glance, this bundle seems to constitute "full" protection. However, there are several critical gaps that must be considered.

Know Your Limits

One of the primary misconceptions about full coverage relates to policy limits—the maximum amount an insurance company will pay in the event of a claim. An attractively priced “full coverage” policy might come with California’s minimum liability limits, which can be woefully inadequate in a serious accident.

Presently, the minimum bodily injury liability limits in California are just $15,000 per injured person, $30,000 per accident. This means that if you have the minimum coverage and cause an accident leading to $100,000 in bodily injury damages, you are personally liable for the $85,000 excess.

The Missing Pieces

In addition to inadequate policy limits, what is often sold as “full coverage” may exclude essential protections that drivers assume are included. Notable omissions can include:

  • Medical Payments (MedPay) Coverage: This covers medical expenses for you and your passengers, regardless of who is at fault. It's a crucial coverage, especially if you or your passengers lack health insurance or have a low-cost health plan with high deductibles and copays.

  • Uninsured/Underinsured Motorist Coverage: This protects you if you're in an accident caused by a driver who either lacks insurance or has insufficient coverage. Given the number of uninsured drivers on the road, this coverage is an absolute necessity.

  • Rental Car Reimbursement: After an accident, your vehicle might be in the shop for weeks. Without rental car reimbursement coverage, the cost of a rental vehicle can quickly add up.

Buying The Right Coverage

So, what can you do to ensure you are adequately protected? Here are a few tips:

  1. Understand What You're Buying

Don't take the term "full coverage" at face value. Ask for a detailed explanation of what's included and, equally important, what's not.

  1. Prioritize High Limits Over Having a Low Deducible

While it's true that selecting higher coverage limits can make your insurance premiums go up, you can offset this cost, if necessary, by increasing your deductibles. This way, even though you might pay more initially if you have to file a claim, you benefit from having more substantial protection due to the higher coverage limits, and the cost difference in terms of your total premiums is a wash, or close to it.

  1. Shop Around

Insurance policies vary widely in terms of coverage and cost. Get quotes from multiple carriers, and compare them not just on price, but on the protections they offer.

In conclusion, the term "full coverage" is more a marketing strategy than a guarantee of comprehensive protection. Make sure you understand the exact coverage you are purchasing, and make sure it includes uninsured motorist, medpay, and sufficient policy limits. Offset the cost of this additional coverage by increasing your deductibles if need be, and remember to always drive safely!


If you or a loved one has been injured in an auto accident, contact Phillips & Associates at (818) 348-9515 for a free consultation today.

You will immediately be put in touch with John Phillips or Patrick DiFilippo, who can help determine whether you have a case and advise you on the best course of action moving forward.

Don't delay. Act now to ensure that your rights are not compromised.


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