I've talked briefly in some previous posts about the different coverages that are available to you and how they can have an extreme impact on your incidents in the future, should you have one. But lately I have been getting a lot of confused people that still to this day, after having insurance for well over 15 years, have never been educated on coverages and insurance in general. I want everyone to be aware of the dangerous language your agent could be using to confuse you.
The issue of, "Full Coverage". There have been a lot of people telling me. "well I have full coverage", when I ask them how high they would like their coverage limits to be. I receive the same answer when I ask how much coverage they have. This is great that you know you have coverage to cover your own car and coverage to protect yourself when you cause bodily injury to another, but this is just scratching the surface. Its like if I told you that your house was covered under any circumstances, only to hide that its only covered for half of its actual value. Full coverage is simply a term that states you have two parts to your policy. Coverage for your own vehicle, this is comprehensive and collision coverages, with their respective deductibles. The second part is where the confusion arises.
Bodily Injury to others, Property Damage, and Uninsured/Underinsured coverage is that second piece of the full coverage pie. Just like your deductibles with comp. and collision, these coverages also have varying limits and coverages. The problem is that agents aren't explaining to their clients that the term "full" doesn't mean anything. You could have the state minimums for coverage and still be considered, "fully covered". Full just simply states you carry Bodily Injury and Property Damage coverage. Heck Uninsured and Underinsured aren't even required in states, and these coverages are in my opinion more important than the first two coverages. So simply stating that you have "full coverage", only tells a portion of the actual story. I will outline which each coverages meanings below;
- Bodily Injury: Covers injury caused to any person(s) as a result of your negligence, will pay for medical bills, lost wages etc.
- Property Damage: Covers any damage you cause to property, including damage to nearby buildings, light posts etc.(Also pays for legal defense costs)
- Uninsured and Underinsured: This coverage is not covering your negligence but rather another drivers. If you are hit by another driver who does not have coverage, who pays for you recovery and lost wages? This coverage will protect you in the event that another persons insurance is insufficient or nonexistent. That is why it can be more valuable to have this coverage in addition to the other coverages. It covers YOU and your health and wages.
Coverage Limits are as follows:
- 25/65: $25,000 per person/$65,000 per incident (Utah State Minimum)
- 50/100: $50,000 per person/$100,000 per incident
- 100/300: $100,000 per person/$300,000 per incident
- 250/500: $250,000 per person/$500,000 per incident
- 500/500: $500,000 per person/$500,000 per incident
Property Damage coverage increases with one limit per incident:
- Coverage increases from: 15, 20, 25, 40, 50, 100, 250 and finally 500 and is represented in the thousands.
As you can see there may be a lot to the story of limits and coverages that you aren't being told. You may indeed have full coverage but that doesn't always mean you have the right coverage for you. Look into your policy and stay educated on what limits and coverages you have to keep your self safe!
I wanted to quickly share some information about policies and what happens when you pay for your annual or 6 month policy all at once. Signing your agreement with your insurance company isn't a binding contract that holds you in until the expiration date. It can be cancelled at anytime per your request. A lot of people don't realize that when you decide to cancel a policy, even if you pay monthly, your prorated unused premium will be refunded to you. A ton of customers feel like they are trapped in a policy and can't start saving money on a new policy because they already paid for their policy upfront. Everyone should be aware that if you are not happy with your policy and are searching and find a better policy, you can switch at any time! If you call into your agent and tell him or her you are canceling, chances are it will get done fairly quickly and jump start the process of returning your premium to you. Most companies can get this done relatively quick and before you know it you could be with your new carrier and better policy and have nothing to worry about.
