If you have full coverage on your car, you may think that all is well. No matter what happens to your car, you are covered. But this may not be true. Often, a person gets full coverage, but this only means they have liability and property damage and collision and comprehensive coverage. Many car owners think this is complete coverage, but they find out after an accident that they didn't. The following are a few ways your full-coverage policy may not be enough.
You may not have enough protection for car replacement
You may believe that your car is covered by the collision portion of your policy if you get into an accident that was your fault, but you may be mistaken. This type of coverage often covers the replacement value of your car. And this is fine unless you have a car loan. If you have a new car, the chances are that you owe more money on it than the car is worth. This is due to the nature of depreciation for automobiles. But insurance companies offer what is called gap insurance. This will cover the difference between the value of replacing your car and how much you owe on the car loan.
You may not have enough liability coverage
If you get into an accident that was your fault, and there are serious injuries to the driver or passengers of the other car, it is the liability portion of your policy that will cover the medical expenses and other claims by those who are injured. However, liability has limits assigned by an insurance company. If these limits are exceeded, you may be on the hook for the additional amount of the claim. This is often not an issue unless you have significant assets. An attorney may seize upon the idea of suing you personally for a claim that exceeds those specified by the insurance policy.
You may not have uninsured motorist coverage
If you get into an accident with someone who does not have insurance, you will be responsible for repairing your own car. This coverage is not automatically included in a full-coverage policy. Liability and property damage covers an accident that is your fault. Collision covers an accident that was another driver's fault, and comprehensive covers almost everything else, but it does not cover uninsured drivers.
The information above does not include every possibility for what a full-coverage policy may not cover. If you have a full-coverage policy, you need to read the entire policy to make sure you understand what it covers and what it doesn't. If you have questions, they should be directed to your insurance agent. And if you discover that your policy needs to cover more, make sure you get a quote from other insurance companies besides your current provider to get the best deal available.
Contact an agency like Policy Center The to learn more.
Share11 June 2020
I still remember the first time I had to chose an insurance policy; I was 17 years old and had just saved up enough money to afford my very first car. I was so excited to begin driving, but overwhelmed with all of the different auto insurance options. My father helped me chose a full-coverage policy that would cover the cost of my car if it were to become damaged in an accident. When I inevitably caused a small fender-bender as a new driver, my insurance company paid for my car repairs, so it sure was the best policy for me! Now that I am older and have learned a lot about home insurance and other types of insurance, I thought I would make a blog to help others who need insurance advice, like what my dad gave me. I hope I can help you make wise insurance decisions!