What Does the term Full Coverage Really Mean?

The term full coverage is used quite often today when speaking to insurance agents and others that are regularly involved in property and casualty insurance. The problem is, the term means different things to different people. What exactly is full coverage and what does it mean?

One of the reasons why full coverage means different things to different people is because it’s not a technical insurance term. In fact, it was created years ago by an insurance agent to mean “all-encompassing car insurance.”

All-encompassing has come to mean different things to different people. Just recently I was receiving a quote for my auto insurance and asked for full coverage from the insurance agent. On the quote that I received, the insurance coverage left out pip (personal injury protection), rental car, and roadside assistance. I don’t know about you, but to me, rental car seems like an essential part of full coverage.

Since there is no real technical definition of the term, it’s easy for people to have different opinions about what it is. If you were to ask me, this is what I would tell you “all-encompassing” car insurance contains:

  • Liability insurance
  • Uninsured motorist insurance
  • Personal injury protection insurance
  • Collision insurance
  • Comprehensive insurance
  • Rental car insurance
  • Roadside assistance

This would round out my full coverage car insurance policy, because all the bases are covered. Liability insurance protects others from my negligent actions. Uninsured motorist protects me from illegal drivers. PIP protects all drivers in my vehicle regardless of fault. Collision and Comprehensive insurance protect my vehicle from outside forces. And finally rental car and roadside prevent me from being stranded without transportation.

The next time you are in the market for new car insurance, make sure to be very clear as to what coverage you do and don’t want on your policy. Experience has shown that assuming everyone’s definition of full coverage car insurance is the same can lead you to not getting the coverage on your vehicles that you want.

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