Full Coverage

Example

“When Jake said he had 'full coverage' auto insurance, he meant he carried liability, collision, and comprehensive coverage, but he was surprised to learn his policy didn't cover his custom sound system.”

Memory Tip

'Full Coverage' is 'Fool's Coverage' - it sounds complete but always has limits and exclusions, so read the actual policy details.

Why It Matters

Understanding that no insurance provides truly 'full' coverage helps you identify potential gaps in protection and make informed decisions about additional coverage needs. This awareness prevents false confidence and encourages proper review of policy terms, limits, and exclusions to ensure adequate financial protection.

Common Misconception

Many people believe 'full coverage' means they're protected against all possible losses and damages. In reality, even comprehensive auto policies have numerous exclusions, deductibles, and coverage limits, and may not cover items like custom equipment, rental cars, or certain types of damage or liability situations.

In Practice

Sarah has 'full coverage' auto insurance with $100,000 property damage liability, $500 collision deductible, and $250 comprehensive deductible. When she causes an accident that damages a $150,000 luxury car, her insurance pays only $100,000, leaving her personally liable for the remaining $50,000. Additionally, her rental car coverage is limited to $30 per day for 30 days, but she needs a rental for 45 days at $50 daily, creating another $2,100 gap in her supposedly 'full' coverage.

Etymology

This informal term emerged in the mid-20th century as auto insurance became standardized, with 'full' implying complete protection, though insurance professionals avoid this term due to its imprecise nature.

Common Misspellings

Related Terms

More in insurance

Other insurance terms you should know

See Also