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TheStreet Open House

Car Insurance: Don't Ask For Full Coverage





Question: Do all full-coverage policies include uninsured motorist, or is this something you have to add on as an extra coverage?

Answer:  If your state requires uninsured motorist, then it might be considered to be part of a full-coverage policy by some. In reality there is no such thing as true full coverage in car insurance.  What many people refer to as full coverage is a policy that includes physical damage coverages of collision and comprehensive in addition to the state-mandated liability coverages. 

This combination is often referred to it as full coverage because your auto insurance policy will cover not only those that you damage in an accident but your own car as well, regardless of fault.

Uninsured motorist bodily injury (UMBI) coverage may be included in some people's definition of full coverage, but typically only if this coverage is required by your state to be purchased as part of your car insurance policy, which it is in 21 states as well as the District of Columbia (See our list of state requirements here). 

Uninsured motorist property damage (UMBP) is required only in seven states and the District of Columbia and normally isn't included when one speaks of full coverage (unless your state does require it).  UMPD covers damage to your car if an uninsured motorist damages your vehicle, but in many states it's not nearly as beneficial as collision coverage.

It's unwise start the car insurance policy buying process with plans just to ask for “full coverage” or a “comprehensive” policy.  You may expect an agent to set you up with coverages that will cover anything that could happen to you and your vehicle, while an agent may put on the policy only his idea of what full coverage is.  (See “ Comprehensive coverage is not all-encompassing”)

Familiarize yourself with the coverages and limits you need and then start comparison shopping for your car insurance policy. 

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