There is No Such Thing as “Full Coverage”
If I had a nickel for every time a potential car wreck client sat across the table from me and swore up and down that they had “full coverage” on their auto policy, I would be able to put all my kids through college—cash.
Look at any major car insurance website and they all have an article that explains there is no such thing as “full coverage”, yet their agents keep pushing “full coverage” on my clients giving them a false sense of protection. Many times, the policy only meets the minimum state requirements for automobile insurance—liability coverage only. Sometimes the policy will include liability, collision, and comprehensive. But that’s about the most generous I have ever seen a “full coverage” policy.
Let me take a step back and explain the types of coverage that may be available through a carrier and what it actually means in plain English:
1. Liability– should you be involved in a collision that is your fault, this is coverage protects others for the damage you cause. It is usually split into bodily injury and property damage. Almost every state (not New Hampshire or Wisconsin) requires this coverage to operate a motor vehicle. In Texas, the minimum requirement for liability is $30,000 per person/$60,000 per accident for bodily injury and $25,000 for property damage.
2. Collision– should you be in a car wreck and your car is damaged, this covers repairs to your car. The collision doesn’t necessarily have to be with another car, it could be with a tree, sign, animal, etc. There is a deductible that you have to pay (typically $500 or $1,000) before the insurance kicks anything in. This is optional coverage, but if you lease or owe money on your car the lender will require you to carry collision on your policy.
3. Comprehensive– this covers damage to your car from outside forces—e.g. hail, tree limb, etc. There can be a deductible and this coverage is optional.
4. Uninsured/Underinsured Motorist (UIM)– this coverage helps protect you from driver’s that do not have insurance or not enough insurance to cover damages you sustain after they hurt you (or your vehicle) and it’s their fault. In Texas this is required coverage, BUT you can waive the coverage by signing a document rejecting UIM coverage. Several people reject UIM to save a few dollars on their premium but regret it after being in a car wreck with someone that doesn’t have insurance.
5. Personal Injury Protection (PIP)– this covers you (or your passengers) for expenses from injuries sustained in a collision regardless of who is at fault. PIP will pay your medical bill and other expenses such as lost wages, child care, etc. that can be shown to be related to the accident. Similar to UIM, in Texas, this is “required” coverage, but it can be rejected in writing.
6. Medical Payments (MedPay)– this coverage is similar to PIP, but it only covers medical expenses. This is optional coverage.
7. Other Optional Coverages (that are self-explanatory): Rental reimbursement, roadside assistance, glass coverage, etc.
Now that your head is spinning, I think you see my point. Some types of coverage are required, but most are optional or can be rejected.
Auto policies are cobbled together based on what kind of protection you want. Unfortunately, most people do not focus on the protection side of things as much as they focus on the cost. Not that cost should not be a factor. It’s just that so many times I have a client tell me, after being rear-ended by a person with no insurance, they wished they had spent the extra $5.00/mo for UIM coverage so they aren’t saddled with thousands of dollars in medical bills or stuck with a broken car they can’t afford to fix.
Here are my two cents (for what it’s worth). If you want full coverage, get Liability (required by state law), UIM, PIP, Collision, Comprehensive, and Rental Reimbursement. If you need to shave a few dollars, drop these in this order: Rental, Comprehensive, Collision, PIP, then UIM. After liability coverage, UIM is the most important because without it you end up with a broken car and medical bills unpaid even though you were hurt by someone else in a car wreck. PIP is the next most important because it covers all your medical bills and lost wages up to the limits of the coverage (get as much as you can afford) regardless of fault.
Making sure you have the right insurance coverage is important, but if you are involved in an accident caused by someone else and injured, call an experienced lawyer that can help navigate and protect you through all the craziness that ensues.
We are here to help
As personal injury attorneys, we have handled many cases involving several types of insurance. While car wrecks may seem straight forward, these cases require experienced lawyers—call us now at 281.339.7349 to see how we can help.