As an independent agent one of the most commonly used phrases when talking about auto insurance is “full coverage.” If you have a vehicle with a loan you need “full coverage”? Does “full coverage” mean you have towing? What deductibles are included in “full coverage”? The problem with that phrase is that it means something different to each individual person! What I prefer to do at Belt Insurance is to break down your coverages by categories and make sure that you have the best coverage in each category.
- Bodily Injury Liability & Property Damage: this coverage is what is included on all insurance policies. Bodily injury coverage covers the other person if they get injured in an accident. Usually your bodily injury coverage is written in amounts “per person/per accident.” For example, the state minimum liability coverage in Ohio is $25,000/$50,000. This means if you get into an accident then your policy will cover $25,000 in bodily injury damages per person and up to $50,000 per accident. Some other common bodily injury limits are $100,000/$300,000 or $250,000/$500,000, it is completely up to you to decide on your coverage. Property damage covers the other persons vehicle and other items that can be damaged in an accident such as buildings, signs, or roads. Common amounts included on policies are $100,000, $250,000 or $500,000. It is completely up to you to decide on your coverage. With both of these coverages the higher the limits the more it costs, but usually you can dramatically increase your coverage for dollars per month.
- Uninsured/Underinsured Motorist’s Coverage: these coverages will protect you if you get hit by a driver who is not carrying insurance or if they do not have enough coverage on their policy to pay for all the damages. Although it can be different your uninsured/underinsured motorist’s coverage usually mirrors your bodily injury coverage. This means if you have a bodily injury coverage of $100,000/$300,000 on your auto policy you most likely have uninsured/underinsured motorist’s coverage of $100,000/$300,000 as well. It is completely up to you to decide on your coverage.
- Collision & Comprehensive deductibles: your deductibles are what you pay out first to cover your personal vehicle if you are involved in an accident. Collision deductibles cover your vehicle if you are in a car on car accident or if you drive into an inanimate object like a building or a pole. Your comprehensive deductible covers your vehicle for fire, theft, glass claims, and hitting animals such as a deer. Many companies call comprehensive coverage “other than collision.” Your collision and comprehensive deductibles can be the same amounts or they can be different, it is completely up to you to decide on your coverage. Common deductible amounts are $0, $250, $500, or $1,000. The higher the deductible the lower the cost of insurance, but the more you must pay out of pocket first. If you have an older vehicle you can opt to not have a collision or comprehensive deductible on your policy. If you do this you can lower your premiums, but you have no coverage on your vehicle if you get into an accident.
- Extra coverage: companies vary widely on the other coverages you can add to your auto policy. I am going to explain two common coverages you can add on almost any policy which are rental reimbursement and roadside assistance. Rental reimbursement covers the cost of a rental car while your vehicle is in the shop. Usually rental reimbursement coverage is triggered by your collision or comprehensive deductibles. If you opt out of collision or comprehensive coverage then you usually cannot add this coverage. Rental reimbursement gives you a specific amount of dollars per day and you only get so many days to have the rental. For example, a lot of our auto policies have coverage for $30 per day and up to 30 days of coverage on a rental. Roadside assistance can often be purchased to cover a tow, flat tire, or being locked out of your vehicle. Usually roadside assistance has a limit that they’ll spend per instance, but it comes in handy when you need it. It is completely up to you to decide on your coverage.
So, after reading this here is a quiz for you! I’m going to list two customers coverages on their 2015 Ford Focus and you tell me if they have “full coverage” or not.
- Bodily Injury: $25,000/$50,000
- Property Damage: $25,000
- Uninsured/Underinsured: $25,000/$50,000
- Collision: $1000
- Comprehensive: $1000
- Extra: None
- Bodily Injury: $100,000/$300,000
- Property Damage: $100,000
- Uninsured/Underinsured: $100,000/$300,000
- Collision: $250
- Comprehensive: $0
- Extra: Rental Coverage & Towing
Now these customers both vary in the amount of coverage they have on their policy, but they could both consider their policies on “full coverage.” It’s important to remember that almost all coverages are optional and can change to your preference. If you have questions about your coverage or want to know more about what you pay for every month call your local agent. We will be happy to assist you in explaining coverages and give you different costs associated with adjusting them!