Are You Sure You Have Full Coverage?

Are You Sure You Have Full Coverage?

By Anthony Marsh

When I meet with a new client, I am often told the client has “full coverage” auto insurance. The truth is, “full coverage” insurance doesn’t exist. No auto insurance covers everything. The question is, are you sufficiently covered?

To decide whethere you are sufficiently covered, you need to understand what various insurance policies cover. Here are some of the auto insurance coverages you could have, and what they mean:

Liability

The coverage your insurance uses to pay to someone else if you are at fault is liability insurance. Washington State minimal limits for liability insurance are $25,000 per person or $50,000 total per incident. You need higher limits to protect yourself in the event an injured person comes after your assets, including, potentially, your house.

Personal Injury Protection

Also known as PIP, this is a form of coverage where your insurance company will cover certain benefits such as medical payments, income loss, household services, even if you were at fault. If your insurance pays out under this policy, it is subject to subrogation, which means you may have to pay some or all of it back.

Uninsured Motorist Coverage

UM covers you if someone else is at fault, but the driver doesn’t have any insurance. You still have to prove your damages and negotiate with the insurance company which will want to pay you as little as possible.

Underinsured Motorist Coverage

UIM is coverage in case someone else is at fault and has insurance but not enough insurance. For example, you are in a serious crash, and your bills are $30,000. The at-fault person has minimum limits of $25,000. Your UIM coverage would cover the $5,000 difference.

Collision Coverage

Specific only to collisions, this covers your property damage regardless of who is at fault. If you crash into a tree, or someone crashes into you, you’re covered.

Comprehensive Coverage

All other kinds of damages to your car are covered under comprehensive coverage. It is primarily used in the unlikely event your vehicle is damaged by falling objects, earthquakes, hurricanes, floods, or vandalism. Comprehensive coverage may cover the theft of your car, but not always. Read your policy carefully.

Full Coverage Defined

This list includes the most relevant forms of coverage, but the question remains: Are you fully, or sufficiently, covered? Even if you have all these forms included in your policy, it may not be enough.

For example, the Personal Injury Protection (PIP) minimum is $10,000, but an emergency room visit costs $15,000 or more. Your PIP may be exhausted from that visit, leaving you nothing for physical therapy, chiropractic, or other treatment.

In another example, perhaps your bodily injury limits are only $25,000. If you are at fault in an accident, you could be sued. If you have equity in your house, a retirement account, or other liquid assets, those things could be at risk.

Think of “full coverage” as a gauge for determining whether your insurance company will cover you sufficiently so you do not have to worry about personal liability.

If you are questioning whether or not your auto insurance plan provides the best protection for you, contact me for a free consultation at anthony@hlg.lawyer.