The Myth of Full Coverage

by Staff | June 4th, 2012

What does the term “full coverage” mean to you?  Do you think that if you cause an accident and someone gets hurt, you are protected by your “full coverage?”  Do you think that the total cost of repairing the other car you damaged will be paid by your insurance company because you have “full coverage?”  Do you think your personal assets are not at risk because you have “full coverage?”  You could not be more wrong.

Full coverage is a myth.  It means nothing in the real world.  It is a phrase created by the insurance industry to give you a false sense of security in the belief that you have enough coverage to pay any claim against you that may arise out of an accident you cause.  Worse yet, if you get injured by a driver who has likewise bought into the “myth of full coverage,” you are likely going to end up owing money or receiving little, if any, compensation because your full coverage and the other driver’s full coverage are minimal.  The reality is that medical care is hugely expensive and even if you have health insurance and get into an accident, the emergency room financial counselor will not bill your health insurance carrier but instead will bill the other driver’s auto insurance, thereby consuming any funds that would otherwise compensate you for your injuries.  And the emergency room will bill the other carrier for the “full value” of the medical services and not the agreed upon amount it would have accepted from your health insurance carrier, which is more like one third of its full value amount.

By way of example, if your “full coverage” is a 50/100 policy, that means your carrier only has to pay the person you injure $50,000.00 if you are found to be legally at fault.  If the person you hit spends three days in the hospital with a broken leg and arm,  has ongoing medical care, and misses work, the likely value of his claim against you will exceed $50,000.00.  What then?  The rest of the compensation for the other driver comes directly from you.  A lien can be placed on your home for any judgment the other driver gets against you or your wages can be garnished.  On the other hand, if you get injured by the other driver’s negligence, and you are similarly in the hospital and need follow up care and miss work, your coverage may not compensate you at all or may only minimally compensate you.

If you don’t understand the “full coverage” that you bought, ask your agent or, better yet, consult a lawyer to make sure you are adequately protected from the Myth of Full Coverage.

Authored by Personal Injury Attorney Ellen M. McCarthy