The Full Coverage Myth – A False Sense of Security
This is a very misleading and often times, very dangerous term. It gives people a sense of false security. The term full coverage implies that you are fully covered when you are in an accident. However, this is a “Full Coverage Myth”. The term “full coverage” doesn’t actually exist anywhere in the law. It is not in a statute or a code. Most people carry the bare minimum coverage required under California Financial Responsibility Law. This means that an owner of a vehicle is required to carry in liability coverage the following: $15,000 per person, $30,000 per accident, and $5,000 property damage. That’s it. It doesn’t cover you when you are injured by an uninsured motorist or underinsured motorist. It doesn’t cover your medical expenses. It doesn’t cover rental or loss of use. It doesn’t cover road side assistance. It doesn’t cover gap insurance. The only thing that “full coverage” could mean, if there ever is one, is that you purchased a combination of coverages such as liability, comprehensive, collision, uninsured/underinsured, rental, towing, etc. So how do you protect yourself and your family? You should consider the following additional coverages.
Uninsured/Underinsured Motorist Coverage – This provides coverage for you and your family in an auto accident when the other driver did not buy any insurance, insufficient insurance, or you’re the victim of a hit and run accident. The amount of coverage you purchase depends on what you believe is necessary to protect you and your family. Let’s take a very simple and easy example, say the at-fault driver bought only the bare minimum liability insurance, 15/30/5 (see above). You’re injured, your medical bills total $20,000.00. The at-fault driver’s insurance company pays you the limit of $15,000.00 because that’s all the at-fault driver purchased. What now? Who pays for the rest of your medical bills? You? That’s not fair. In fact, it’s sort of a slap in the face. Well, this is where your Underinsured Motorist Coverage kicks in if you purchased it. If you bought $30,000.00 per person and $60,000.00 per accident, your own insurance will kick in to pay for the $5,000.00 left in medical bills. But it doesn’t stop there. What about your pain and suffering? Your own insurance pays for that too! Depending on the circumstances, if your case is warranted, it is obligated to pay up to $10,000.00 in remaining coverage. Remember you paid for $30,000.00 per person in Uninsured Motorist Coverage. You already accepted the $15,000.00 from the at-fault driver’s insurance, and you have another $15,000.00 from your own insurance available to you, which totals $30,000.00 in coverage. The cost of getting Uninsured Motorist Coverage is minimal. The cost of not getting it can be devastating.
Collision Coverage – This provides coverage for you when you are at-fault for the accident or when the other party has insufficient property damage coverage! Remember the bare minimum liability coverage of $15,000 per person, $30,000 per accident, and $5,000 property damage? Well in this case, the $5,000.00 property damage coverage is important for you. If it cost more than $5,000.00 to repair your car, and the at-fault driver’s insurance offers you the limit of $5,000.00 for your car, what do you do now? Can’t driver half-a-car or part of a car, can you? Well you can if you want. But I don’t. Well you can turn to your own insurance, and under this coverage, they will repair your vehicle for you regardless of the other party’s limits. It also covers your automobile repairs when you are at-fault for the accident, minus your deductible.
Comprehensive Coverage – This provides coverage for your vehicle when it is damage and the event had nothing to do with an automobile collision. For example, like theft, fire, vandalism, flood, falling objects, etc.
Medical Payments Coverage – This provides immediate coverage for your medical bills in case you are injured. It will provide coverage regardless of fault.
There are other coverages that you should consider as well such as gap coverage, towing and road service, and rental.
The term “full coverage” is a myth. In order to fully protect yourself and your family, you should consider getting a mix of the above coverages. Please call The Law Firm of R. Sam for further details.