Your car was damaged by a tree that fell on it during a storm. A tow truck is needed and a rental car is required. Your car also needs to be repaired/replaced. It’s time to contact your insurance company. It’s a good thing that you have comprehensive coverage for your car insurance. Or do you?
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Full coverage car insurance is not a term that is popular, despite its popularity. Full coverage is an insurance policy that covers both physical and liability. A single policy can include all coverages. It is important to understand what your policy covers before you buy a car.
What is Usually Covered?
The common notion of full coverage is actually a combination of three insurance options that provide the following protection:
Liability insurance: Insurance that covers the costs of injuries or repairs to another party if you are at fault in an accident. Before you can add collision or comprehensive coverage, liability insurance must be in place.
Comprehensive insurance: Insurance that covers damage not caused by a collision. This includes damage from a falling tree or theft, flooding, fire, hitting an animal, and weather-related damage. It may also include windshield replacement. Comprehensive insurance coverage can differ, so it is a good idea for you to review your current car insurance policy.
Collision Coverage Insurance is insurance that covers damage to your vehicle if it collides with another vehicle or an object on the road, pothole, or flips.
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What is not covered?
It’s easy for an insurance agent to assume that you have all the insurance coverage you need. Many auto insurance options may not be included in insurance policies. These options can be added to your policy if you wish to be completely covered.
- Uninsured or Underinsured Motorist Insurance: This insurance covers your car’s repairs if the other person responsible for the accident is unable to pay. In some states, this insurance is mandatory.
- Gap Insurance: If you purchase a new vehicle, this coverage is worth it. If your car is damaged beyond repair, you can get Gap Insurance to pay off your auto loan.
- Medical Payments Insurance: This coverage covers you and your passengers for post-accident medical expenses, regardless of who is to blame.
You can get emergency road service coverage if you are stranded or need to fix a flat tire.
- Rental car coverage: This coverage covers you for the cost of renting a vehicle if your car is damaged in an accident.
- After-Market Equipment Insurance: This coverage is necessary if you have added electronics, expensive wheels or made other modifications to your vehicle. Most insurance covers only factory-installed parts.
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Do I need full coverage?
You don’t have to have collision or comprehensive insurance, as state laws do not require it. However, if you buy or lease a car, your lender may require that you have full coverage with a low-deductible.
If your full coverage is not sufficient
Imagine that you were in an accident and that the car you struck was a luxury sedan. Two of the victims sustained life-threatening injuries and were taken to the hospital. You may discover that you do not have enough insurance after an accident.
If you select a full coverage plan, your policy will automatically adjust to the minimum amount that is required by each state. Most insurance policies express the amounts covered like this: 25/50/25 ($25,000/$50,000/$25,000). These numbers represent the maximum amount allowed for any personal injury claim, all personal injury claims for the same accident, and the maximum property damage for an accident.
It’s clear that $25,000 wouldn’t cover an emergency room for someone seriously injured or enough to replace a luxury sedan totaled. Your attorney could demand that you pay the difference between the amount your policy covered and actual damages. You may want to check the coverage of your policy if you have a home or a savings account to protect your assets from any court judgments.
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Consult an attorney about your auto insurance coverage issues
It can be difficult to understand your auto insurance policy. It’s worth speaking with an experienced attorney in your local area if you are having trouble understanding your auto insurance policy.