Tuesday, February 9, 2016

What Does 'Full Auto Coverage' Really Mean? (You May Be Surprised)

Confusion abounds about what 'full coverage' means, especially with new drivers. Many new drivers aren't sure what constitutes full coverage, and they want to know if they have 'full coverage' or 'liability only' on their auto insurance policy.  Unfortunately, there is no such thing as full coverage insurance!

Here’s the problem --  'full coverage' has become a common term in the insurance business, but it can mean lots of different things.  If a bank tells you that you need full coverage, they typically mean Collision and Comprehensive coverage.  But you might think that 'full coverage' means you have every kind of insurance coverage for your vehicle. That is not the case.

Collision and Comprehensive Insurance

Collision and Comprehensive are commonly used auto insurance terms, but they are only basic coverages. Collision is what fixes or replaces your vehicle if you have an accident. Comprehensive is what fixes or replaces your vehicle after storm damage, theft, vandalism, or other situations that don’t involve an accident. Both have deductibles that require you to pay a certain amount of the repairs.

These two coverages are usually required by lenders and are sometimes called 'full coverage'.  But there are other things you may THINK you have when you say full coverage, that aren’t included, but are very important!

One of those items is Rental Reimbursement.  This is the coverage that supplies you with a rental car while your car is in the shop for repairs due to a claim.  Without it, you pay out-of-pocket for a rental car all the while your car is being repaired. This could cost you hundreds or even thousands of dollars!

Another is Towing coverage, which tows your vehicle if it breaks down or even runs out of gas.

Another important coverage that is only pennies a day is Uninsured Motorist. If you are hit by a driver who has no insurance coverage, you may have to pay for the repairs yourself! Even though auto insurance is mandatory in Washington, many drivers either choose to go without it, have let it lapse, or cannot qualify for it due to previous accidents or citations. Without insurance, the other driver may not be able to afford the repairs on your vehicle. If there are injuries involved, that makes it even worse! If the driver doesn't have the financial ability to pay, your insurance company will not be able to collect and it will have to come out of your own pocket. With Uninsured Motorist coverage, you are covered (up to the amount of the policy).

So what should you do to make sure you’re protected?  The best recommendation is to work with your local SAV-ON agent, who can sit down and review your coverage line-by-line.  They’ll explain each item, make suggestions for gaps you may have in your coverage, and make sure that you know EXACTLY what you’ve got!  No more vague 'full coverage' nonsense.  Call us today at 888-867-2866 for a quote or to review your current policy!