Category Archives: Auto Insurance

What is “full coverage” with regards to automobile insurance?

Full coverage is NOT a term used by insurance companies or agents, but is a phrase that we run into often that is used by our customers. We may know what you mean by the phrase “full coverage,” but since there is no agreed-upon definition, it is to your advantage to review specific coverages and make sure that you have what you need in your situation. The common usage of the phrase “full coverage” may be to imply that the insured has all of the coverages offered by an insurance company on their policy. This may include but is not limited to:

  • Liability coverage (both bodily injury and property damage – to others)
  • Uninsured/Underinsured Motorist coverage (both bodily injury and property damage – covers people in your vehicle and your vehicle when the other driver is at fault)
  • Medical coverage (immediate payment for injuries to the driver and passengers in your car – without determination of fault or negligence)
  • Comprehensive coverage, with deductible (loss due to theft or damage other than collision)
  • Collision coverage, with deductible (damage to your car from collision, while driving or flip-over)
  • Towing and Roadside Assistance coverage
  • Rental Reimbursement coverage
  • You may also consider specific company-only optional coverages such as:
    • Accidental Death coverage
    • Gap protection coverage
    • New Vehicle replacement coverage
    • Accident forgiveness (first, or minor)
    • Deductible reduction (diminishing deductible)
    • Guaranteed renewal
    • Audio System coverage
    • Special/custom equipment coverage
    • Stated value coverage
    • Agreed value coverage

Check with your agent to make sure you do have “Full Coverage,” in the way that you understand it and whenever possible, specify exactly which of the above you are interested in.

What is the difference between Replacement Cost and Actual Cash Value (ACV)?

Actual cash value only pays to replace your home or property after subtracting a deduction for depreciation. For a higher premium, you can purchase replacement cost coverage, which pays the actual cost of replacing your home or property at the price of what it would cost to purchase that item new, today. Replacement cost coverage premiums are about 10 percent more than ACV. Replacement cost contents is an “endorsement” you should definitely consider. (Endorsements are “forms” or changes/additions of special coverage to your policy)