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Who really has "full coverage" on their auto insurance policy?

The answer is real simple. No one. I believe that many people think they have this coverage because we have become so familiar with the term. That is not the case at our agency and I will tell you why. If you look up "full coverage" on Google you will see my point. You may notice that the top results state that the term is misleading, does not exist, or may be interpreted in different ways. They are all true. Some people believe that there are three options: "PIP", "Liability", and "full coverage". I am going to try to break it down so that hopefully you will understand what car insurance covers and how it works: $10,000 in personal injury protection(medical bills, lost wages, death reimbursement) and property damage liability (the others person's property such as car, fence, house, etc.) are required to register and drive a vehicle in the State of Florida. $10,000 of coverage for another person's bodily harm, up to 20,000 per accident, bodily injury liability, is required at the time of certain accidents and moving violations. Here is where it gets tricky. Once "comprehensive" and "collision" is added to the policy the vehicle is insured at "actual cash value"(something similar to a Blue Book value). When clients obtain this coverage is usually when they believe they now have the infamous "full coverage". The problem is that this coverage is nowhere near to being full of anything. 10/20/10 liability is the lowest required coverage in the nation. Any serious accident can easily result in damages outside policy limits that could bring in lawsuits that would require lawyers’ fees, judgments, and court fees to be paid out of pocket. That is why when I hear people say they have "full coverage" I feel a sense of disappointment in the industry because the client was never properly explained what they truly purchased. Even if you max out all the coverages available it still wouldn't be "full coverage". There are people who recognize this risk and purchase a personal umbrella policy for additional protection towards their assets of one to five millions dollars above their personal auto and homeowner’s liability limits. Let’s take a look at this example that happened in front of our own office. A lady lost control of her vehicle and ran into a parked car that hit our building,

The vehicle that was parked was a total loss. The owner received $10,000 from the lady’s property damage liability coverage and her own insurance company paid the rest of the actual cash value of the vehicle minus a $1,000 deductible (not the rest of what she owed to the finance company). The owner of the shopping center came to our office attempting to acquire claim information from us. When I explained to him how the coverages work, that there was no way the lady's policy would cover all of the damages he calmly responded, "I'll sue her". In this case the person responsible is liable for the portion the insurance company paid for the totaled car, the $1,000 deductible that owner of the parked car had to come up with, and the damage of the building, hence "liability coverage"". The majority of clients who says they have "full coverage" would be in this same predicament. This is without taking into consideration the driver's medical bills (up to $10,000 are covered) or vehicle. If vehicles are fully covered then Gap insurance would not be offered or required at dealerships. So if you thought you had "full coverage" and now you are learning that you are probably underinsured next time someone asks you what type of insurance you have you might say what the law and the finance company require. I would also advise you to know the deductible on the comprehensive and collision since that would be your out of pocket expense at the time of a car accident for the repair or value paid for your vehicle. If you have any questions do not hesitate to shoot me an email at

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