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June 24, 2024

What Does Full Coverage Car Insurance Mean?

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Most states require that you have insurance for the vehicle that you own, and the requirements vary from state-to-state. Essentially, insurance is required to protect you and others in case there is a motor vehicle accident.  The type of motor vehicle insurance for those states that require it is typically liability insurance as a car accident lawyer knows all too well.

What Is Liability Insurance? Is Liability Insurance Considered “Full Coverage”?

Liability insurance alone is not considered to be “full coverage.”  Liability insurance for your motor vehicle helps protect you financially if you are determined to be at fault for a motor vehicle accident that causes injury to another person and/or damages their property.  Liability insurance typically provides two types of coverage according to our friends at Kiefer & Kiefer:

  1. Bodily Injury Liability Insurance; and
  2. Property Damage Liability Insurance.

Bodily injury liability insurance covers the costs associated with the injuries caused to other people involved in the motor vehicle accident at which you were found at fault.  These costs can include medical expenses and lost wages.  If you are sued, it could also include the injured party’s legal fees.  Property damage liability insurance covers the costs of repairing or replacing the property that you damaged in the motor vehicle accident for which you were found to be at fault.  This could include the other person’s vehicle, a fence, or a building.  It may also include the other party’s rental vehicle expenses.  The coverage limits for these are usually expressed as three numbers.  For example, if your policy says the coverages are 25/50/25, the first number (25) is the maximum amount your policy will pay for bodily injury per person.  The second number (50) is the maximum amount your policy will pay for bodily injury per accident, no matter how many people were injured.  The third number (25) is the maximum amount your policy will pay for the other party’s property damage.

What Is Considered “Full Coverage”?

“Full coverage” generally means you carry comprehensive coverage and collision coverage in addition to your liability coverage. Each one protects against different types of risks.  It should be noted that “full coverage” does not include PIP insurance or UM/UIM coverage.

Comprehensive insurance provides coverage for damage to your vehicle due to something other than a collision. This includes damage due to theft, vandalism, natural disasters (for example, hail damage, or damage due to a hurricane or a flood), fire, falling objects, and hitting an animal.  Sometimes it is also known as “other than collision” coverage because it covers such a wide range of damage.

Collision insurance provides coverage for damages to your vehicle due to collision with another vehicle or an object, regardless of who was at fault.  It will pay for the repairs to your vehicle or will reimburse you the actual cash value of the vehicle if it was totaled.  Actual cash value is the value of the vehicle at the time of the collision, and it is typically the replacement cost of the vehicle minus depreciation, or what the Kelley Blue Book determines it to be.  Collision insurance is usually required if you leased or financed the vehicle.

At the end of the day, it is essential for you to check the specific laws in your state with regard to whether motor vehicle insurance is required, and if so, what those requirements are.  Regardless, simply having liability insurance alone does not equate to “full coverage” for your vehicle. If you are involved in an accident and need help with your insurance, contact a lawyer near you.

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