Contributed by Misty D Murphy
“I have full coverage!” Um no, you probably don’t and it’s time to re-evaluate your policy and possibly your Agent if they are using the term ‘Full Coverage’.
The term full coverage implies that the insurance company will cover the entire cost of all losses, regardless of the type of damage or how the loss occurred. In reality a policy includes a collection of coverages choses from a wide variety of options, tailored to each insureds specific needs. Full coverage is just a myth. There is no full coverage, but there is adequate.
Let me explain further. Each state has financial responsibility laws that requires every driver to have insurance that provides liability coverage for damages the driver may cause. Each state sets a state minimum.
In Alaska, for example, minimum coverage requires only Bodily Injury limits of $50,000 per person, $100,000 per accident, and $25,000 for Property Damage.
Let’s take a look at some other coverages that are heavily suggested in the industry for a personal auto policy:
Medical Payments: This is considered a ‘no-fault’ insurance coverage of an auto policy that covers healthcare expenses associated with an accident to injured parties including policy holders and passengers. Fun fact many health care policies do not cover injuries resulting from an auto accident.
Uninsured/Underinsured Motorists: This coverage pays for your injuries and losses and those of your passengers when the at-fault driver has no or has insufficient coverage for the amount of damages that is caused. Uninsured motorist is one of the most important coverages you can have in Alaska with an estimated average of 15% of drivers not having car insurance on the road.
Collision: Coverage that pays to repair or replace your car when it is damaged by a collision with another automobile, or in a single vehicle accident. If you can’t go buy a car with cash to replace the one you are driving, add collision with a deductible you can afford.
Comprehensive: Coverage that pays to repair or replace your covered vehicle that is stolen or damaged by fire, theft, vandalism or animals on road way – you know the MOOSE! Window needs replaced? Check the comprehensive coverage and deductible. You might be surprised what $0 deductible does to your bottom line premium.
Other notable coverages to look into: Gap Insurance, ACV vs RC, Towing, Storage, Car Rental, Road Side Assistance, Ride Share, or an Umbrella. Also depending on who the carrier is, they can have carrier specific coverages such as a Window Replacement policy. Talk with Each carrier about your risk and see what fits your specific needs the best.
I ask each of YOU when was the last time you had a conversation or review with your insurance agent? Do you know your coverage, your gaps, and what your expectation of the insurance contract is? Do you know who to call when you have a claim? Do you know what your first step should be if you have a claim?
Take it from me – a girl that got into insurance because I had too many declined or negative experienced claims, so I quit my bank job to get licensed and learn: Don’t buy insurance based on price. Instead, look at the coverage and buy based on the protection you need. The Matanuska Valley has many wonderful insurance agents/brokers to choose from. Interview several when making a decision to find the best fit.