If I had a dollar for every time a client told me they had “full coverage” auto insurance … let’s just say I could fund a small billboard campaign across Atlanta.
Want the truth? Full coverage auto insurance isn’t a real thing. You’ll find no policy at an insurance agency labeled “full coverage.” So when people say it, they usually mean that they have a combination of all the different types of coverages.
So, what is full coverage auto insurance really? Let’s break it down and define what most people are talking about, and why it matters more than you might think.
What Is Considered “Full Coverage” on Car Insurance?
Typically, when people refer to full coverage vs. comprehensive auto coverage, they’re talking about having these five types of insurance:
- Liability
- Uninsured/Underinsured Motorist (UM)
- Medical Payments (Med-Pay)
- Collision
- Comprehensive
The first three, liability, UM, and med-pay, play a key role in personal injury claims. The last two, collision and comprehensive, deal with property damage.
So, how do these types of coverages work in real life?
Liability Insurance
Liability insurance protects other people and their property in case you are at fault in a wreck. This one’s required specifically in Georgia, making it important in defining what “full coverage” auto insurance really is.
By law, you need at least:
- $25,000 to cover injuries to one person
- $25,000 per property damage incident
- $50,000 total per accident if more than one person is hurt
More specifically, what that all means is that you cannot get more than $50,000 total for a wreck, no matter how many passengers are in the car.
For example, if you get into a wreck with only one passenger, you’ll each get $25,000. But if you get in a wreck with 2 passengers, only one person can get the full $25,000 while the other two people have to split the remaining $25,000.
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Uninsured/Underinsured (UM) Insurance Coverage
This might be the most overlooked coverage out there, and one of the most important when looking at “full coverage” auto insurance.
For the state of Georgia, about 18% of drivers don’t carry insurance. Across the U.S., it’s almost 14%. That means in a crash, there’s a real chance the other driver won’t have enough, or any, coverage to pay for your injuries. This is why getting UM coverage is a MUST in Georgia, specifically, but is a great thing to have no matter where you live.
UM coverage protects you in three scenarios:
- The other driver has no insurance
- The other driver doesn’t have enough insurance
- It’s a hit-and-run, and the driver disappears
UM coverage can also play a crucial role in fatal car crashes, where wrongful death claims are involved. These claims often exceed the at-fault driver’s policy limits, especially when the victim was a primary income earner or had dependents. These types of claims are often valued much higher than injury claims because they include damages far beyond medical expenses, including loss of life, loss of future income, and loss of a loved one for families.
My advice? Match your UM coverage to your liability limits. It’s usually affordable to upgrade, and it can be a lifesaver in the event you’re in a wreck.
Add-on vs Reduced-by UM Coverage
Choosing which type of UM policy you have makes a huge difference in how you get your bills covered. For this reason, when you’re selecting which UM policy you want, you’ll want to select an “add-on” policy.
An add-on policy means that you get to “add on” whatever amount of UM insurance you have to the other driver’s insurance. For example, if you are hit by a driver who has $100,000 in liability insurance and you have $50,000 in add-on UM insurance, you will be able to collect up to $150,000 in insurance from the at-fault driver.
On the other hand, you could select “reduced-by” UM coverage. This means that when you’re in an accident, you will deduct your UM insurance amount from the at-fault driver’s insurance. Then, whatever is left over will be for you to collect.
So, from our example, since the driver who hit you has a $100,000 liability coverage policy and you have a $50,000 reduced-by UM policy, you will only have $100,000 to collect from the at-fault driver’s insurance.
Let’s Break It Down
Think of it this way: if your UM policy is equal to or less than the at-fault driver’s liability coverage, you essentially don’t have UM coverage. If your UM coverage is more than the at-fault driver’s liability coverage, subtract the other driver’s liability amount from your UM amount, and that is the amount of coverage you’ll have in that situation.
This is a tricky concept, so you can also think about it this way: if you have more UM coverage than the driver who hit you, then the total insurance coverage you may recover is the amount of your UM; if the driver who hit you has more liability than you have UM, then the most you can recover from insurance is the other driver’s liability limit.
In practice, this is how it all works:
Let’s say your medical bills from a crash total $75,000. The other driver only has $25,000 in coverage. Without UM coverage, you’re stuck with a $50,000 bill.
But if you have $100,000 in UM coverage, you may be able to recover:
- $25,000 from the at-fault driver
- Up to another $75,000 if you have reduced-by coverage or $100,000 if you have add-on coverage.
Check out how you may be able to recover more than the policy limits.
The bottom line? Don’t assume “full coverage” auto insurance includes the most protective options. You need to review your policy details and make sure your UM coverage is working in your favor.
Med-Pay Coverage
Med-pay is like a mini health insurance policy attached to your car. If you or your passengers get hurt in a crash, med-pay steps in to help pay the bills, regardless of who was at fault. You also don’t have to wait for a settlement or prove fault; it pays out quickly.
It’s especially helpful for covering:
- ER visits
- Ambulance rides
- Co-pays
- Deductibles
Learn what happens when your health insurance gets involved in a settlement.
Collision & Comprehensive Coverage
These two are often confused when defining what full coverage auto insurance is. We’ll make it simple:
- Collision: Covers damage to your car from an accident (even if you’re at fault)
- Comprehensive: Covers non-collision events (hail, falling trees, vandalism, theft)
They’re not required by law, but your lender might require them if you’re financing or leasing your car.
Review Your Coverage After an Accident With Rafi Law Firm
By now, you should understand what full coverage auto insurance really means, and if you’re relying on this phrase to think you’re protected, it might be time to take a second look at your policy. Most importantly, you need to know what you’re working with before a crash happens.
If you’ve been in a wreck and want to understand your coverage better, contact our lawyers at Rafi Law Firm. We’ll go over your insurance, figure out what you’re entitled to, and make sure you’re not left paying out of pocket when you shouldn’t be.
Need a personal injury lawyer to take on the insurance companies? Submit your free case evaluation below. We respond 24/7!
Frequently Asked Questions
Is No-Fault Insurance Full Coverage?
No-fault insurance, also called Personal Injury Protection (PIP), isn’t the same as full coverage. It’s designed to cover your medical bills and lost wages after an accident, no matter who was at fault, but it varies from state to state. However, it won’t pay for damage to your car or other property. For that case, you’d need separate collision and comprehensive coverage.
