Full Coverage On An Auto Policy: What Does It Mean?

Many people use the term “full coverage” when talking about their auto policy, but what does that term really mean? “Full coverage” can mean different things to different people. For example, one person might think they have full coverage because they carry the state minimum requirements, another person may think it is because they have liability along with comprehensive and collision. (As an insurance agent, we are told to never use that term as there is always a monetary amount higher than what the policy covers.)

There really isn’t an exact definition. However, there are 6 essential coverages along with the minimum limits we recommend:

1. Bodily Injury (BI) Liability
This coverage helps pay for injuries you may cause to others in an accident; can be anything from medical bills, loss of income, or pain and suffering.

Recommended limits: 50/100, $50,000 per person, $100,000 per accident (most the company will pay in 1 accident)

2. Property Damage (PD) Liability

This coverage helps pay to repair or replace another party’s damaged property, i.e. their vehicle, in the event you are at fault for an accident.

Recommended limits: $25,000 per accident

*Liability coverages tend to be written out as 50/100/25, these numbers represent BI
per person/ BI per accident/ PD per accident*

3. Medical Payments

This is an optional coverage which helps pay for injuries to those in your vehicle, no matter who is at fault. It may also extend to injuries sustained while you are a pedestrian or while riding in another car.

Recommended limits: nothing less than $1,000 (the coverage applies to per person)

4. Uninsured/Underinsured Motorist Bodily Injury Liability

Although it is a state requirement to carry auto insurance, it is estimated that approximately 14% of Californians are driving uninsured*, and another 23% driving underinsured**. This coverage helps pay for injuries sustained if hit by an uninsured, underinsured, or hit-and-run driver.

Recommended limits: match your bodily injury limits, $50,000 per person, $100,000 per accident

5. Collision

Displayed as a deductible, this coverage helps pay to repair or replace your vehicle in the event you collide into something (another car, building, pole, etc). Company will pay the estimated cost, less your deductible.

Recommended limit: $500 deductible

6. Comprehensive

Also displayed as a deductible, this coverage helps pay to repair or replace your vehicle, but for something other than collision, such as a fire, tree falling on it, or vandalism. Company will pay the estimated cost, less your deductible.

Recommended limit: $500 deductible

So, there you have it: one of many possible formulas for full coverage auto insurance. Of course, even these six coverages don’t cover everything. There are plenty of auto insurance options, such as roadside assistance, that can offer even more protection.
Journey is appointed with some of the best top-rated auto insurance companies, such as Mercury, Safeco, and Travelers. Do you have the Journey recommended limits?

* http://www.iii.org/fact-statistic/uninsured-motorists
** http://www.commonwealthfund.org/publications/issue-briefs/2015/may/problem-of-underinsurance

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