As an auto insurance agent, one thing I’ve come to find out common the misunderstanding of “Full Coverage” auto insurance is and how many consumers drive with the misleading confidence of being fully covered for any circumstance that may occur. That common misunderstanding is extremely dangerous and can leave a driver vulnerable to uncovered losses.

Have you asked yourself the question of what full coverage really covers? You may have been misled by the term itself which suggests that you are “fully covered”. The unknown truth behind full coverage can be shocking to most of us.

The common term “full coverage” will usually consist of two parts:

• Liability Coverage- which consists of damages to others which you are liable for, including bodily injury and/or property damage. As an example, we’ll use California’s state laws which require a driver’s minimum auto insurance coverage to be $15,000 bodily injury coverage per person, $30,000 bodily injury per accident, and $5,000 property damage.
  
• Comprehensive and Collision Coverage – which is coverage for your vehicle. Comprehensive coverage will cover damages to your vehicle caused by anything other than collision such as theft, fire, vandalism, etc. Collision will cover damages to your vehicle in case of a collision.

The above two parts compose what is known to many and sold to many as “full coverage”. What is uncommonly disclosed and often misunderstood by consumers is the risks left uncovered even with full coverage auto insurance.

You may be driving comfortably thinking that you’re fully covered, buy here is the unknown truth. Say you run into a 2000 Toyota Camry which is a quite common vehicle valued at roughly 12,000. Say the Toyota Camry is occupied by 2 passengers and 1 driver, a total of 3.

The vehicle is totaled valued at $12,000 and all three drivers are injured for a total $15,000 each. You might be thinking that it’s a good thing that you purchased full coverage right? Well, that is a good thing but your liability coverage only covered $5,000 for the vehicle which leaves you owing $7,000 and your liability coverage only covered a total of $30,000 which leaves you owing $15,000 for medical. Plus say your deductible is $1,000 which leaves you owing $23,000.

You get the point. There is really no such thing as “full coverage” auto insurance. The best thing to do is to increase the liability coverage to the point where you feel is sufficient. Although the law only requires you to get $15,000 bodily injury coverage per person, $30,000 bodily injury per accident, and $5,000 property damage, commonly referred to as 15/30/5 you can raise your limits to 25/50/25 all the way up to 100/300/100.

The most vulnerable uncovered risk is liability coverage; therefore, make sure that even if you buy liability coverage only, purchase more than just the state minimum requirements in order to make sure that you do not end up making an expensive mistake.