FULL COVERAGE MYTHS AND REALITIES
The term “Full Coverage” is one of the most commonly used, and most misunderstood, expressions in the U.S. auto insurance market. Many drivers assume it means total protection with no limits, deductibles, or exclusions.
In reality, “full coverage” is not a legal or technical term. Understanding what your policy actually includes and what it does not cover is essential to avoid surprises when an accident or claim occurs.
In reality, “full coverage” is not a legal or technical term. Understanding what your policy actually includes and what it does not cover is essential to avoid surprises when an accident or claim occurs.
Myth 1: Full Coverage is an official, standardized policy
Reality: No auto insurance policy covers all risks.
Auto insurance is not a mechanical warranty or maintenance plan. It typically does not cover:
Auto insurance is not a mechanical warranty or maintenance plan. It typically does not cover:
- Engine, transmission, or electrical failures
- Normal wear and tear on tires, brakes, or batteries
- Preventive maintenance
- Damage from prolonged vehicle use
Common confusion: Personal items stolen from inside your vehicle are usually not covered.
Myth 2: Full Coverage protects in every situation
Reality: There is no insurance product officially called “Full Coverage.”
Insurance companies sell individual coverages, not a product with that name. When people use this term, they usually mean a combination of:
- Liability coverage
- Collision coverage
- Comprehensive coverage
Common confusion: Two drivers can say they have “full coverage” and still have very different levels of protection. Coverage limits, deductibles, and exclusions vary by company, policy, and driver profile.
Myth 3: With Full Coverage, I don’t pay anything after an accident
Reality: All policies include deductibles and coverage limits.
A deductible is the amount you pay out of pocket before your insurance company covers the rest.
Example: If repairs cost $3,000 and your deductible is $500, you must pay $500 yourself.
Common confusion:
- Deductibles can differ between collision and comprehensive coverage.
- Liability limits are important: if damages exceed your policy limit, you are legally responsible for the remainder.
- “Full coverage” does not remove financial responsibility.
Myth 4: Full Coverage automatically includes towing and rental cars
Reality: These services are optional add-ons and must be selected separately.
- Roadside Assistance
- Rental Reimbursement
Common confusion:
- Rental coverage only applies for covered claims, not mechanical breakdowns.
- Roadside assistance usually has limits on usage or cost.
- Coverage may vary by insurer.
Myth 5: Full Coverage protects me if I am hit by an uninsured driver
Reality: You need Uninsured / Underinsured Motorist (UM/UIM) coverage for this protection.
UM/UIM is not automatically included, even if you have collision and comprehensive coverage.
Common confusion:
- UM/UIM may cover medical expenses and, in some cases, vehicle damage.
- Without this coverage, drivers may be exposed to financial loss even if they are not at fault.
Conclusion: Don’t ask for “Full Coverage”; understand your policy
Instead of asking for “full coverage,” drivers should focus on understanding their policy:
- Actual coverages included
- Policy limits
- Deductibles
- Optional add-ons
Insurance coverage is defined by contract terms, not informal labels. Reviewing your policy ensures that you are truly protected and avoids unexpected gaps.