Why “Full Coverage” is a bad word around here.
![FullCoverageMyth FullCoverageMyth](https://hcih.insure/wp-content/uploads/2023/09/FullCoverageMyth-756x350.png)
Full Coverage is generally accepted as having Collision, Comprehensive (other than collision) and your states minimum Liability requirements (varies by state).
It provides a false sense of security to insureds who believe they’re properly covered at all times from the word “Full”.
As an adjuster, I can’t tell you how many calls started with “I have full Coverage and I need a rental.” To which I’d have to reply with, “Yes insured person, I see you have comp and collision but you did not pay for rental…” To which they’d reply “I don’t understand, I have Full Coverage!”
… and that’s how that generally goes.
People are also incorrectly led to believe covering their vehicle during a loss is the only thing that matters as long as you have the state minimum liability coverage.
What you’re essentially telling the world is that you’re ok with paying any damages over that amount and you’re not worried about protecting yourself, your family and your assets should you cause any damages higher than the state minimum requirement…
Many suffer from not having these other important coverages which could play a vital role should you suffer a loss.
Liability. Why?
Two scenarios to drive the point home.
Scenario 1:
Your vehicle has a tow hitch receiver with a shiny ball on it and you reverse into a 1999 Toyota Camry’s front bumper in a shopping plaza parking lot. The other vehicle is parked and unoccupied. So no worries on injury.
The damage is simply a crack/hole/impact to the front bumper but nothing else is damaged (crash bar, radiator, etc…).
Generally speaking your state minimum lability (25K in Arkansas) should be able to cover the bumper repair and rental for the claimant during the repairs. Your vehicle doesn’t have a scratch so you are technically fully covered for this loss since your policy will be able to pay for all of the damages to indemnify the claimant.
Great! so what am I even rattling on about….?
Scenario 2:
You’re on the highway heading to work and running late, you drop your morning coffee/tea and look away for a split second…
You strike and run a car carrier off the road carrying 5-10 (pick your favorite luxury/exotic make and model)…
The driver is injured and all of the cars on the carrier including the truck are destroyed including the trailer! You’re in Arkansas and have “Full Coverage” (based on the accepted definition), so you’re like good right?
Your insurance carrier is going to pay the policy limit of $25,000.00 for all of the property damage which total’s closer to a million than your policy limits and attempt to settle the drivers injury (won’t go into much detail on this here).
Now remember, you elected to only purchase state minimums and have indirectly accepted to cover any losses over the state minimum requirement of $25k.
How prepared for this are you?
**While this is an extreme example, it happens! Perhaps not a car carrier with exotics but what about a school bus or 1 $100,000.00 vehicle or even a $60k Truck (got a ton of ’em here in Arkansas)?
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