Car insurance can be complicated. Not every policy is the same, and different insurance companies handle certain things in different ways. This difference means that it’s important to check your insurance policy and be sure that you understand precisely what is covered. Otherwise, you run the risk of being caught by surprise at the worst time.
“Full Coverage” Doesn’t Always Mean What You Think It Does
In the insurance world, “full coverage” usually means that your policy includes both first-party and liability insurance. In other words, if your car is damaged in an accident, your collision coverage will pay for your repairs. This coverage is different from a liability-only policy, which pays only for damages you cause. However, just because you have first-party coverage on your vehicle doesn’t mean that everything will be covered. You’ll want to check whether you have both collision and comprehensive insurance as each coverage type handles different types of damage.
You’re Responsible for Your Deductible
Your collision and comprehensive coverages come with a deductible. The deductible is the amount of a claim that you’re expected to pay out of pocket when an accident occurs. A standard deductible is $500, but it’s not uncommon to see $1,000 or $250 deductibles instead. In general, that deductible amount is subtracted from the total cost of repairs. The insurance company will either write you a check for the difference or pay the difference to a repair shop; you’re responsible for paying the repair shop the amount of your deductible. Deductibles are owed on a per-accident basis, so if you’re unlucky enough to have two accidents in a year, you’ll pay two deductibles.
You Don’t Have to File With Your Insurance
If you get into an accident and are not at fault for it, you don’t have to file the claim with your insurance company. You can call the insurance company of the driver who hit you and files a complaint about damages that way. This saves you from having to pay a deductible, but it can take a lot longer. There’s also the chance that your claim will be denied if the other insurance company doesn’t think their driver is at fault. It’s up to you to decide which route is best for any given situation.
The best way to know what your policy covers is to review it carefully. Ask your agent about anything you don’t understand. Once you’re comfortable that you know what you’re paying for, you’ll have an easier time making decisions in the event of an accident.