When your full coverage insurance isn’t actually full coverage

Auto insurance can be a confusing thing. When you hear the words full coverage in terms of your car insurance, you think you’re good to go. You’re covered for anything that could come your way. Unfortunately, full coverage is not really what you think and having a basic policy like this could hurt you if you are ever involved in a car accident in New Jersey or elsewhere — regardless of who is at fault.

What does full coverage actually mean? Why should you consider more coverage? What happens if you’re in an accident and your insurance is lacking?

Full coverage is…

Full coverage auto insurance is an insurance policy that meets the state’s minimum requirements for comprehensive, collision and medical coverage. It usually does not cover a whole lot. It may be okay for some minor accidents, but that is about it.

Why consider more?

Full coverage insurance does not cover things like roadside assistance, uninsured/underinsured motorist insurance, Gap coverage or car rentals — all things that viewed as conveniences rather than needs.

While adding these extras and increasing the amount of coverage offered under your basic insurance plan may seem like a waste of funds, if you find yourself in an accident — whether you were at fault or not — you could end up paying a lot out of pocket for your own care and losses or the care and losses suffered by others. Who wants that?

Car accident examples

Car accidents can happen anywhere and anytime. There is no rhyme or reason to them. Here are a few examples:

  • Scenario number one: You were out and about, running errands when you drove through an intersection and were T-boned by another car whose driver ran a red light. Come to find out the driver who hit you was not insured. This means immediate relief will fall on you and your insurance company, but if you do not have an uninsured motorist policy, your insurance could deny your claim. You may still file civil claims against the other driver to seek compensation.
  • Scenario number two: You were on your way to work when you took your eyes off the road for a second and crashed into someone else. He or she was hurt pretty badly. Your insurance paid out until it reached its max liability, but it is not enough to cover the victim’s medical bills. They could end up suing you for compensation and if they win, it means you could lose personal assets trying to pay the judgment.

At the end of the day, it does not matter if you are an accident victim or the responsible party, if you do not have enough insurance coverage you could face a lot of financial and legal trouble.