Shaaban & Biedgoly

For many drivers, having auto insurance is not just a legal requirement but also a vital safety net that can protect their finances, property, and well-being. Yet, despite the widespread understanding that insurance is necessary, many people still rely on the phrase “full coverage,” believing it guarantees protection against every conceivable risk on the road.

If you’ve ever been told by an insurance agent, friend, or family member that you must have “full coverage” for peace of mind, you may have assumed that this type of policy safeguards you from any and all liability or property damage. But the unfortunate truth—is that “full coverage” simply does not exist as a formal, all-encompassing product in the insurance world. “Full coverage” is a myth and term thrown around in the insurance industry that ultimately provides people with the false belief that they have all the coverage they need.

As a personal injury law firm, we see firsthand how incorrect assumptions about car insurance cause stress, legal battles, and financial burdens.

What Is “Full Coverage”?

The term “full coverage” is often used to describe a policy that combines multiple forms of auto insurance, typically:

Liability coverage (bodily injury liability and property damage liability)
Collision coverage
Comprehensive coverage

In some states or by some insurance agents, “full coverage” might additionally imply the presence of coverage such as uninsured/underinsured motorist protection (UM/UIM) or even medical payments coverage (MedPay) or personal injury protection (PIP). However, there is no standardized definition of “full coverage” across insurance carriers. Each company—and even each agent—may use the phrase differently.

Key Takeaway: “Full coverage” is not a legally defined term. Insurance companies don’t sell a policy labeled “full coverage.” Instead, they package different coverages to meet a customer’s needs, but those packages can still leave significant gaps.

Why “Full Coverage” Is a Misleading Term

Consumers buy insurance labeled “full coverage,” but then discover—often too late—that the policy doesn’t cover everything.

Misconception: It’s easy to assume that if your insurer calls a policy “full coverage,” you must be protected from every possible scenario.

Reality: Once you read the fine print, you’ll see that insurance policies have exclusions, limitations, and deductibles. Even a robust policy won’t necessarily pay for:

Rental car costs while your vehicle is in the shop
Emergency roadside assistance if you’re stranded
Custom modifications or parts you’ve added to your car
Non-accident-related losses, such as personal items stolen from your vehicle

This disconnect between expectation and reality can set you up for financial and legal pitfalls if you’re involved in a car accident/motorcycle accident or your vehicle is otherwise damaged.

Types of Coverage Often Mistaken for “Full Coverage”

When insurance agents or policyholders refer to “full coverage,” they’re usually referencing a combination of these coverage types:

Liability Coverage

Liability coverage is legally required in almost all U.S. states. It typically comes in two forms:

Bodily Injury (BI) Liability: Covers medical expenses, lost wages, and other damages for other people if you cause an accident.
Property Damage (PD) Liability: Pays for damage to others’ property (usually their vehicle) when you’re at fault.

Note: Liability coverage does not pay for your own medical bills or damage to your own vehicle if you cause a collision.

Collision Coverage

Collision coverage pays for damages to your own vehicle in an accident, regardless of who is at fault. However, you’ll typically have to pay a deductible before your insurance steps in. The amount of that deductible can vary widely (e.g., $500, $1,000, or more).

Comprehensive Coverage

Comprehensive coverage pays for damage to your vehicle not caused by collisions. Common examples include:

Theft
Vandalism
Fire
Natural disasters (floods, storms, earthquakes)
Falling objects (tree branches, hail)
Animal collisions (e.g., hitting a deer)

Like collision, comprehensive also generally requires the policyholder to pay a deductible before coverage applies.

Uninsured and Underinsured Motorist Coverage

Uninsured Motorist (UM) coverage kicks in if you’re in an accident with a driver who doesn’t have any insurance. Underinsured Motorist (UIM) coverage applies when the at-fault driver has some coverage, but not enough to pay for the full extent of your damages.

It is important to note that in order to pursue your UIM coverage (at least in California), your UIM policy limit must be greater than the liability limit of the at fault party. For example:

Your bodily injury damages (economic and non-economic) total $50,000 after a car accident. The at fault party has a $30,000 per person bodily injury liability limit. You have UIM coverage at $30,000 per person. Your UIM coverage would not apply because it is the same as the at fault party’s policy limit. If you instead had a UIM limit of $50,000, you could be entitled to the $20,000 above the at fault party’s policy limit (your $50,000 minus the $30,000 under the at-fault party’s policy.

Many drivers assume that “full coverage” automatically includes UM/UIM. However, in several states, you have to opt in to UM/UIM coverage, or it may be offered at lower limits than your liability coverage. Also, based on the example above, it is important to maximize your UIM coverage to ensure you have plenty of coverage available.

Medical Payments (MedPay) or Personal Injury Protection (PIP)

MedPay: Covers certain medical expenses for you and your passengers after an accident, regardless of fault.
Personal Injury Protection (PIP): Covers medical expenses, lost wages, and other related costs due to an accident, again regardless of fault, but it’s typically mandated in “no-fault” states.

These coverages are not automatically included in many standard auto insurance packages. You may need to purchase them separately or live in a state that makes them mandatory.

Common Misconceptions About “Full Coverage”

Despite the widely held belief that “full coverage” has you covered for anything, there are many ways this myth can lead to financial losses or complicated insurance disputes.

Assuming Everything is Covered, No Matter What

When people say they have “full coverage,” they often think:

“If someone hits me and runs, I’m covered.”
“If I total my car, the insurance company will pay the entire amount.”
“If I accidentally drive into a ditch, my insurer will fix it.”

These assumptions might be partially true if you specifically have collision, UM/UIM, or certain endorsements. But if, for instance, you only purchased liability and collision yet opted out of UM/UIM, a hit-and-run situation could leave you stuck with unpaid bills for both vehicle repair and medical costs—unless you can track down the at-fault driver.

Overlooking Policy Exclusions and Deductibles

Insurance policies frequently contain exclusions. An exclusion is a scenario in which the insurer will not provide coverage. For example, your policy might exclude:

Commercial activity: If you use your car for ride-sharing or delivery without specific endorsements, you may not be covered in an accident.
Intentional damage: If you intentionally damage your vehicle, there’s no coverage.
Racing or track events: If you’re participating in a race or track day, your policy could refuse to pay for any resulting damage.

Moreover, deductibles can be as high as $1,000 or more, meaning you’ll have to pay that amount out-of-pocket before insurance kicks in. Thus, even a “full coverage” policy doesn’t automatically mean $0 out-of-pocket costs.

Underestimating the Importance of Coverage Limits

Every coverage type has a limit, which is the maximum amount your insurance will pay. If your coverage limit for bodily injury liability is $25,000 per person and $50,000 per accident—but you injure someone who racks up $75,000 in medical bills—you could be on the hook for the extra $25,000.

Mistakenly believing you have “full coverage” can lead you to think your limits are adequate, even if they aren’t. In serious or catastrophic collisions, medical bills and property damage can skyrocket, and minimal coverage limits might leave you woefully underinsured.

Missing Out on Additional Coverage Options

Because people assume “full coverage” is comprehensive, they may not realize the value of optional or supplemental coverage. Offerings like rental reimbursement, gap insurance, endorsements for custom parts, or higher liability limits may provide crucial protection but aren’t part of a standard policy.

The Reality: Coverage Gaps That “Full Coverage” Fails to Address

Insurance providers do not typically label specific policies as “full coverage,” but they will bundle coverages together to provide a robust package. Even so, these bundles have gaps. Some of the most common gaps include:

Coverage for Personal Belongings in the Vehicle

Your auto policy usually won’t cover personal items stolen from your car or damaged in a crash. You may need to rely on homeowners or renters insurance for coverage of personalbelongings. If you only have an auto policy and assume it covers everything inside your car, you’re likely out of luck in a theft or fire scenario.

Rental Car Reimbursement

If your car is in the shop after an accident, you’ll want a replacement vehicle to get around. Standard auto insurance policies typically don’t include rental car reimbursement unless you add it. This coverage can provide daily reimbursement for a rental or rideshare costs while your primary vehicle is unusable.

Roadside Assistance

Roadside assistance is often another add-on, not automatically included. If your car breaks down or you get a flat tire, you may be forced to pay out-of-pocket for towing or roadside service unless you’ve purchased roadsideassistancecoverage.

Custom or Modified Vehicle Parts

If you’ve upgraded your car’s audio system, installed custom rims, or made any modifications, your standard policy might not cover these accessories if they’re stolen or damaged. You’d need specialendorsements or coverage for custom parts and equipment to recoup the cost of these modifications.

How Misconceptions About Coverage Affect Personal Injury Claims

From a personal injury perspective, misunderstandings about “full coverage” can drastically impact your ability to recover damages when you’re in a car accident/motorcycle accident—whether you’re the victim or the at-fault party. For instance:

Delays and Denials: Insurers might initially deny or delay paying out claims if you don’t have the coverage you believed you had. This can force victims to pay out of pocket for immediate medical needs.
Insufficient Compensation: If you lack adequate uninsured/underinsured motorist coverage and the other driver has no insurance (or very low limits), you might not be able to recover the total cost of your medical bills, lost wages, or pain and suffering.
Legal Complexities: If you’re at fault and your liability limits are too low, the injured party (or their attorney) may sue you personally for additional compensation. This puts your personal assets at risk.

Steps to Ensure You Have the Right Coverage

To protect yourself and your family, it’s crucial to tailor your auto insurance policy to your unique needs. Here are practical steps:

Read Your Policy in Detail
This might sound obvious, but it’s an often-overlooked step. Examine your declarations page to identify each coverage type, coverage limits, and deductibles. Look out for additional riders or endorsements that might be relevant.
Ask Your Insurance Agent the Right Questions
- “Does my policy include collision and comprehensive?”“What are my liability limits, and are they enough to protect my assets?”“Do I have uninsured/underinsured motorist coverage?”“Is roadside assistance or rental car reimbursement included?”“Do I have coverage for custom parts or equipment?”
If you receive vague or incomplete answers, press for clarity or consider shopping around for a more transparent insurer.
Increase Your Liability Limits
While carrying the state minimum meets legal requirements, it often falls short in real accidents involving substantial property damage or bodily injuries. Increasing your limits to 100/300/50 (i.e., $100,000 bodily injury per person, $300,000 per accident, $50,000 property damage) or higher can provide added financial security.
Evaluate Optional Coverage
- UM/UIM: In some places, you can reject UM/UIM in writing. Think twice before rejecting it, as it can be invaluable if you’re hit by an uninsured driver.
- MedPay or PIP: Even if not mandated in your state, having medical payments coverage can help you quickly cover hospital bills and co-pays.
- Rental Car Reimbursement: For a small additional premium, you can add coverage to avoid paying out-of-pocket for transportation if your car is in the shop.
- Roadside Assistance: If you don’t have a roadside plan through another service (like an auto club), adding it to your policy can be cost-effective.
Consider an Umbrella Policy
If you have substantial assets, a personal umbrella policy can provide extended coverage beyond your auto liability limits. This is especially relevant if you’re concerned about lawsuits involving high damages.
Review and Update Annually
Life changes—moving to a new city, buying a house, getting married, or adding teenage drivers to your policy—can drastically affect your insurance needs. Conduct an annual review with your insurer or broker to ensure you’re still well-covered.

How a Personal Injury Lawyer Can Help

A personal injury law firm like Shaaban & Biedgoly is an invaluable resource if you’ve been involved in a car accident/motorcycle accident and discover that your coverage is not what you believed it to be. Here’s how attorneys can assist:

Policy and Coverage Analysis
Personal injury attorneys can help interpret the complexities of your policy, identify exclusions, and determine if your insurer is wrongfully denying or delaying a valid claim.
Negotiating with Insurance Companies
Insurance companies are for-profit entities and may prioritize their bottom line over paying out large settlements. A skilled lawyer can negotiate on your behalf to seek the full amount you’re legally entitled to under your existing coverage or the at-fault party’s policy.
Filing a Lawsuit if Necessary
If negotiations fail, your attorney can file a personal injury lawsuit to hold the at-fault driver—or, in cases of bad faith, your own insurer—legally accountable. Litigation might be the only way to secure fair compensation for your injuries, lost wages, and other damages.
Ensuring Statutory Compliance
Every state has its own statute of limitations for filing personal injury claims. Missing these deadlines can bar you from any recovery. A lawyer will ensure your paperwork is filed correctly and on time.
Guidance for Future Coverage
If you’ve discovered significant gaps in your existing policy, a personal injury attorney—often in conjunction with insurance professionals—can provide guidance on adjusting your coverage to avoid future pitfalls.

Frequently Asked Questions (FAQs)

Q1: Does “full coverage” really not exist at all?

A: Correct. It’s not an official insurance term. While many people (and even some agents) refer to a robust combination of coverages as “full coverage,” there’s no policy labeled or guaranteed to cover every possible scenario.

Q2: I already have liability, collision, and comprehensive. Should I buy more coverage?

A: That depends on your situation. If you have assets to protect, or you frequently drive in areas with a high number of uninsured drivers, uninsured/underinsured motorist coverage or umbrella insurance might be worthwhile. Talk with a reputable insurance agent and evaluate your risk tolerance.

Q3: What happens if the at-fault driver doesn’t have insurance, and I only have liability coverage?

A: Unfortunately, if you don’t carry UM/UIM protection, you may not have recourse through your own insurance if the at-fault driver is uninsured or underinsured. In such cases, you may need to file a lawsuit against the driver personally, but recovering damages from someone who lacks insurance or assets can be very challenging.

Q4: Can I add coverage options mid-policy?

A: Yes, most insurers will allow you to add endorsements or adjust your policy outside the standard renewal period. However, changes might result in additional premiums, and you won’t receive any retroactive coverage for incidents that occur before the coverage was added.

Q5: Why is understanding coverage limits important for personal injury cases?

A: Coverage limits determine the maximum payout your insurer will provide. In a serious accident with high medical costs, if your limit is too low, you could be personally liable for remaining bills. Conversely, if another driver’s limits are too low, you won’t be fully compensated unless you have additional protections (like UM/UIM coverage).

Conclusion

“Full coverage” is more of a myth than a reality—an advertising buzzword or convenient shorthand that can unwittingly lull drivers into a false sense of security.

From a personal injury perspective, the repercussions of misunderstanding your coverage can be immense. You might face out-of-pocket costs for repairs or medical bills, protracted legal battles with other drivers or insurance companies, and the unpleasant surprise of discovering that your so-called “full coverage” doesn’t address critical needs.

If you have been injured in a car accident or motorcycle accident and you’re unsure about your insurance coverage—or the coverage of the at-fault driver—Shaaban & Biedgoly is here to offer guidance and representation. Contact Shaaban & Biedgoly here today for a free consultation.

"Full Coverage" Auto Insurance Does Not Mean "Full Coverage"