The term “full coverage” auto insurance is commonly used in the insurance world, but it is often misunderstood. Many drivers assume that full coverage means they are covered against all problems or accidents related to your vehicle, but this isn’t entirely accurate. Signet Insurance Group would like to share some of these myths and clarify what full coverage truly means in auto insurance.
Myth 1: ‘Full Coverage’ Means Comprehensive Protection Against All Risks
The most common myth is that full coverage auto insurance shields you against every possible mishap. In reality, full coverage typically refers to a combination of coverage types that provide a broad level of protection, but it doesn’t cover every conceivable scenario. What Full Coverage Usually Includes:
• Liability Insurance: This is mandatory in most states and covers bodily injury and property damage you may cause to others in an accident.
• Collision Coverage: This pays for damages to your vehicle resulting from a collision, regardless of who is at fault.
• Comprehensive Coverage: This covers non-collision-related damages to your car, such as those from theft, vandalism, natural disasters, and contact with animals.
Myth 2: Full Coverage Equals Unlimited Coverage
Another misconception is that full coverage provides unlimited coverage. Each component of a full coverage policy has its own limit, which is the maximum amount your insurer will pay for a covered claim. Understanding Policy Limits:
• Liability Coverage: It has limits per person injured, per accident, and for property damage.
• Collision and Comprehensive Coverage: These typically have a limit based on the actual cash value of your vehicle.
Myth 3: Full Coverage Auto Insurance Covers Personal Injuries or Property Loss in All Situations
Full coverage auto insurance does not automatically include personal injury protection (PIP) or medical payments coverage, which can pay for medical expenses for you and your passengers. Similarly, personal property that gets stolen from your vehicle may not be covered under your auto policy. Additional Coverages You Might Need:
• Uninsured/Underinsured Motorist Protection: Covers you in case you are in an accident with a driver who does not have sufficient insurance.
• Gap Insurance: Essential if you lease or finance your car, covering the difference between what you owe and the car’s actual cash value if it’s totaled.
Myth 4: Full Coverage Is Always Expensive
While full coverage auto insurance is typically more expensive than minimum liability coverage, it does not always break the bank. Factors like your driving history, vehicle type, and deductible choices greatly influence the premium. Ways to Reduce Costs:
• Shop Around: Compare quotes from different insurers.
• Increase Deductibles: Higher deductibles can lower your premiums but mean more out-of-pocket costs in a claim.
• Discounts: Look for discounts like safe driver, multi-car, or bundling with other types of insurance.
Home, Business, Life & Auto Insurance Agency in Henderson, North LV, Reno, Spring Valley, Enterprise, Sunrise Manor, Paradise & Las Vegas, NV
Understanding the scope and limitations of full coverage auto insurance is important. It is a combination of different coverage types designed to protect you financially in many scenarios, but not all. Assess your individual needs and risks. Speak with an insurance agent to find the policy that provides the right level of protection for your situation. Call Signet Insurance Group today.
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