THURSDAY, MAY 18, 2023
When it comes to auto insurance, the legal minimum doesn't cover much more than basic liability. So, when people refer to full coverage, they typically mean a policy that includes liability, comprehensive and collision. Liability is required by law. Comprehensive and collision will help to cover your losses in the event of theft and accidents and other incidents.
However, just having these three policies in place doesn’t entirely constitute full coverage. This is the case because there’s no way to write a policy that guarantees total coverage no matter what. Insurance is all about covering risks, and we can only really protect ourselves against known risks. While we can buy insurance for highly-unlikely scenarios, it's not worth the trouble in most instances.
With this in mind, it’s critical that we redefine full coverage. Full coverage means that you are reasonably covered against likely damages and losses. You probably don't need to worry about being hit by a meteorite. But, it would be nice to know that, if your car is stolen, you'll only have to pay the deductible in order to replace it with a car of the same value.
With all of this in mind, what sort of coverage should you be carrying — beyond liability, comprehensive and collision — if you want to be reasonably protected against likely damages?
Here are some options:
100/300/50
100/300/50 refers to the recommended structure for liability coverage. The legally mandated minimum might not even cover most new cars, so the recommended minimum is $100,000 for personal injury per person, per accident, $300,000 for personal injury total per accident, and $50,000 for property damage per accident.
Gap Coverage
Losing a car while you're still paying it off can leave you in the hole — even after filing your insurance claim. Gap coverage helps you to pay off what's remaining on your loan. If you want full coverage, this is a necessity for a new car.
Better Car Replacement insurance
With better car replacement insurance your insurer will foot the bill for a car that's one-year newer than your current model. Your car isn't worth what it was when you bought it, so this gives you a little breathing room in shopping for a new vehicle.
If you want full coverage within reason, these three options are a good starting point. They will greatly reduce the amount of risk you’re exposed to while behind the wheel, or even while you’re out of the car.
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