So you want to add full coverage to your auto insurance policy? First off, let’s be clear, there is no such thing as Full Coverage. Then what is Full Coverage auto insurance?
If Not Full Coverage, Then What?
In Missouri, you are required to carry Liability and Uninsured Motorist coverage on your auto. This is the bare minimum coverage the state requires by law.
Liability:
Pays for bodily injury and property damage if you’re found at-fault in an accident.
- Bodily Injury = You run into one or more individuals causing injury to them.
- Property Damage = You run into/damage one or more autos, a guard rail, a light pole, etc.
Uninsured Motorist:
Protects you and your passengers should you suffer injuries due to some else’s fault and they do not carry auto insurance.
READ MORE: 10 Ingredients That Impact Auto Insurance
What is Full Coverage Auto Insurance?
When someone refers to Full Coverage they are referring to Comprehensive and Collision coverages.
If your auto is damaged and you want the insurance company to repair or replace it, these are the coverages you will want.
Comprehensive:
Collision:
Also known as Comp or Other Than Collision. This will provide physical damage coverage to your auto if you hit an animal, experience a hail storm, fire, theft, or vandalism.
Will provide physical damage coverage if your auto is damaged in an accident. Whether you’re at-fault or not, Collision is going to help you repair or replace the damage. Maybe you back into a light pole at the grocery store or run into another vehicle…Collision coverage fixes your auto.
You have the option to purchase Comprehensive and Collision in addition to the basic liability coverage required by the state. Most often if you have a loan on the vehicle your bank will require Comprehensive and Collision coverages.
What Full Coverage Auto Insurance Is Not
The term Full Coverage is often misinterpreted to mean anything and everything is covered. When in reality that’s not at all what your policy says.
There are a number of optional coverages that are not required by state law. For instance:
- Underinsured Motorist
- Medical Payments
- Roadside Assistance
- Car Rental Reimbursement
- GAP Insurance
- Accident Forgiveness
Be clear with your insurance agent what it is you want covered. If you’re unsure, ask.
How Does the Deductible Work?
Comprehensive and Collision coverage are subject to Deductibles. Each one has a separate Deductible.
Let’s say you carry a $500 deductible on both Comp and Collision.
- Comprehensive Deductible: $500
- Collision Deductible: $500
Driving home at night you run into a deer. The deer does $3,000 of damage to your truck. Coverage can be found under Comprehensive for this accident. You are responsible for the first $500 since that is your Deductible. Your insurance company will pay for the remaining $2,500 to repair your truck.
You can have a higher Deductible on Collision than you do on Comprehensive if you want (or vice versa).
Higher Deductibles can mean a lower premium. However, if you increase your Deductible be sure you can afford it. Can you comfortably say you have $1,000 (or whatever number you decide on) in your bank account at any given time to afford your Deductible?
The Bottom Line
Take yourself back to the mid 1990’s. The days of Michael Jordan and the Chicago Bulls. Jordan, arguably the best to ever play the game.
He had a coach. Someone that guided and taught him.
Don’t take on insurance by yourself.
Find a coach. An insurance coach. A person that is willing to take the time to help you understand what and why you’re buying.
If you would like to create a game plan, click here and we will schedule a time.
