What does “Full Coverage” Really Mean?

Val at Desk Before I began my career in the Insurance Industry I knew nothing about car insurance except you had to have it. Growing up I had heard a few vocabulary terms which basically sounded like gibberish and I just thought, my parents are responsible they have it covered. I’m good, I’m sure I have full coverage. I just assumed I had full coverage, because when you are a young driver why wouldn’t your parents have full coverage on an expensive vehicle? And because I have full coverage I am covered for anything, right?

It wasn’t until I was an adult and working in the industry that I learned that full coverage wasn’t a real term to the insurance companies. Before I was licensed as an agent I would answer the phones and take down information for quotes, questions, changes etc. to pass onto the agents.  The most common change I received was to add on or substitute a vehicle. When I would scroll through the list of questions I would hear 8 or 9 times out of 10 “I want full coverage”. Well on my list of items to ask, there was no full coverage check box.

Full coverage is not a true term in the insurance world. When we add your vehicle onto your policy there isn’t a button to click called “Full Coverage”. What does exist are the different coverage options that could make up that term. You see, each and every one of us will have a different definition of what we each think full coverage means. Many of us may say, “Ok I’ve purchased a vehicle and now I have full coverage on it. If anything happens my insurance company will take care of it.”

When you ask for full coverage, what you are really asking for is Physical Damage coverage aka Comprehensive and Collision Coverage. These two coverage options provide coverage towards the actual physical damage to your vehicle.comprehensive-coverage (1) Each coverage has a separate deductible and they do cover different things.

Comprehensive coverage is what will give your vehicle protection for any loss other than a collision. Some companies will list on your policy “Other than Collision” instead of Comprehensive. So when would I use comprehensive coverage? This coverage is for theft, fire, vandalism, a tree branch falling onto your parked vehicle or a rock hitting your windshield. Like the definition and the info graphic – anything other than an actual collision.

So, what does collision coverage mean?  This cocollision cartoonverage is when you are at fault in an accident and your vehicle is damaged. You would pay your deductible and the company would be responsible for the rest. These two coverage limits can be optional however they are required if you have a financed or a leased vehicle. The finance company may require a specific deductible so be sure to check with them just to be sure.

If you own your vehicle outright you have the option to decline these coverage options. This would mean your vehicle is covered just with liability which only provides bodily injury and property damage to the other party, up to your policy limits, when you are at fault in an accident. Woah! That was a lot of info let me try and break it down a little more. If you were at fault and your vehicle was damaged and you do not have collision coverage, then you would be responsible for making any repairs or replacements to your vehicle. However, if you are not at fault in an accident and your vehicle is damaged the other party would be responsible for paying for the damages and/or repairs.

Some of you ask us what our opinion is on vehicles that are older. “If my vehicle is a 1995 Toyota Camry should I have the physical damage coverage, it’s so old it may not be worth it!”  If this is the case, where you have an older vehicle and it isn’t financed you may not want to have comprehensive and collision coverage. In this situation, you would need to consider a few things. What the value of the vehicle is; would it cost more to have those coverage options added to that vehicle than it would to replace the vehicle entirely; and could you replace this vehicle without the assistance of the insurance company if you have a total loss? cry face emojiRemember, I mentioned in my last post about how Insurance exists to protect you from financial hardship.  Will you be in a state of financial hardship like this emoji if you had to replace a vehicle unexpectedly? These are the questions we will ask our customers because the decision is ultimately up to them.  They also need to factor in the cost and if they can afford it, again “Will it be a financial hardship to replace a vehicle right now”? Luckily companies offer a range in deductible options to help even out the cost. Quick tip: The higher deductible you have, the lower the premium will be!

There are additional endorsements you can add onto the policy in addition to the comprehensive and collision such as rental, towing, glass, GAP etc. Every company offers different additional coverages so be sure to check with your specific company on all the additional endorsements you could add on. IMG_2800So, if you are one of those people who thinks “I have full coverage so everything is covered” you may want to look at your policy, or ASK YOUR AGENT.  Check to make sure you have comprehensive and collision and see if you have any additional endorsements.  Because if there is a loss and you assume you are covered, you’ll be wishing you checked your policy. Assumptions in your insurance are never a good thing. They can lead to you paying out of pocket for a loss that could have been covered. Don’t assume that your definition of full coverage is going to cover you, always look at your policy and call us to be sure. Winky face emoji.

 

American Diversified Insurance Services, Inc

A: 201 Natoma St Folsom, CA

P: (916)985-7500 F: (916)985-7302 T: (916)389-1820

E: info@amerdiv.com W: www.amerdiv.com

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How to Insure your New (or old) Boat!

My husband and I just got a boat. “Got”, being the key word here in that sentence. Let me start from the beginning. My husband is a boat person. He has always had a boat since he was old enough to own and operate one. When I met him a few years ago, he did have a boat. The picture below is of us on one of our first boat trips together on that boat! You can’t really see the boat but you get the idea. This boat was a 75′ and it worked, however there were several issues. salty dog He ended up selling it to a buddy because it was becoming more of a hassle than anything else. Months passed and then, we got another boat, a jet boat. This one was given to us from another buddy who had just the hull of the boat, NO engine and it needed massive amounts of interior work. But, my husband the champ mechanic said “I’ll take it and work on it!” Well, it sat in our driveway, untouched for months. Finally, before we moved out of that particular house we got rid of it. I was happy to have my full driveway back because parking on the street in front of your own home stinks.

Fast forward a few months and he again has the itch. He tells me, “Babe, we need to buy another boat! I’ve always been a boat guy and this summer will not be fun without one.” So, the hunt began, and each night for the past two months he was religiously searching on the internet for boats. Some were awesome, but the price wasn’t there for us; or some were just going to be too much work for what we wanted.

One night we had just finished eating dinner. I had moseyed into the family room and left him at the table. Our son had retreated into his room, because that’s what 13-year-old boys do, and I had just sat down on the couch to catch up on my DVR. Then, I hear him going nuts in the kitchen. “Oh, my gosh, oh my gosh, oh my gosh…Hello Sir,” He was so excited he just started talking on the phone and I had no clue what the heck he was doing. He had been looking on Craigslist, a popular website for people to post things for sale. Someone had posted in the for-sale section “Free boat to anyone that wants it”. IMG_4569 The post was only online for 8 minutes before my husband called. Ok, now if you remember our jet boat experience from above I was extremely weary of someone posting “free boat.” However, this one seemed for real.

My husband spoke with this man on the phone for at least a half an hour and scheduled a meeting for the very next day. He met with this man, who simply didn’t want it anymore. He had other plans for his side yard and didn’t want the hassle of trying to sell it. He wanted to give the boat to someone who would simply enjoy it, and someone who also knew a lot about boats so they would know what they are doing. He quizzed my husband and son about boats and said, “Ok now follow me to my house and it’s yours.”

I know what you’re thinking right now, something must be wrong with it. I’m a huge skeptic when it comes to things like this too, and I find it hard to believe that someone just gave away for free a perfectly good boat. Well, we only had to order two parts on Amazon and put a new battery in it, total cost $160.00. You know what, she runs like a dream. Here is our first test drive on Folsom Lake! Mind you when we took her out it was not summer yet so it was stinking cold! IMG_4558It is not a brand-new boat, a 1989, but it had barely been used. There are a few minor tears in the interior but that isn’t anything a little love couldn’t fix. The boat was just taking up space in his yard. Wow! I still cannot believe it! We got a boat! For Free!

So now what? Time to insure it and get some boat insurance. The funny thing is my husband already asked me to add it to our auto insurance. Unfortunately, we cannot add a boat onto our auto policy, but we can purchase a separate boat policy that will cover it. “Make sure you add on the additional coverage if the propeller scrapes against a rock!” he said. I kind of chuckled in my head a bit because I thought, shouldn’t he just know there isn’t an additional coverage just for that. When you have a boat policy and hit anything, meaning if you scrape a rock on your outboard, hull, etc. that goes under your collision coverage (if you have collision coverage). Because it is considered a collision, or most commonly referred to as an at fault accident. “Well, I want collision so make sure it is on there!” he said.

When you are insuring a boat, there are a few things to know when you call in for a quote. First, other than the year make and model you need to know what the value of the boat is. Why do we need the value? Because the company will need to know how much coverage to provide to you should you have a loss. How much should I insure my boat for? Because we didn’t purchase this boat, I now need to do some research on what the value is for this boat I have. I could also go and get an appraisal, which would be the best option so I know exactly how much the boat is worth.

We will also ask you for the Hull ID. What’s this? The Hull ID is like the VIN for vehicles. This is the identification number for that specific vessel. It is usually found on the registration and also on the boat in the rear upper right corner. You’ll have to take a look on your boat for yourself, and boats older than a 1972 may not have the Hull ID physically on the boat.

Next, we need to know where the boat will be stored, what the length, top speed and horse power is, and whether the motor is inboard or outboard. IMG_4868Why do we need these items? Because the rate you get is based off certain factors including the ones above and not just the age and value. You also want to make sure you have the trailer information i.e. the value and the VIN if you want to insure the trailer. This is something that is added onto your boat policy, not your auto policy. If you have an outboard motor on the boat you may want to list the value of the outboard motor for your policy. This way if there is a loss the insurance company will know the specifics and value of your motor. There may be an additional endorsement for more coverage so check with your insurance carrier.

One of the coverage questions we’ll ask you is if you want comprehensive coverage and collision coverage. Do I really need this? Well, no you don’t, these are optional coverage items you do not have to purchase. However, if you choose to purchase only liability and have a physical damage or theft loss you’d be on your own for replacing or repairing your boat. Insurance exists to protect you from financial hardship. So, if you are fully able to pay for another boat on your own without the assistance of insurance, then just purchasing liability is what you can do. When you have comprehensive and collision and have a covered loss, all you would have to pay is your deductible and let the carrier do the rest. Now, if another boater hit you their insurance would be responsible for any repairs/replacements; unless they didn’t have coverage then the loss may go under your uninsured motorist coverage (if you choose to purchase that coverage). Check with your specific carrier about additional coverage options you can purchase such as on water towing, fishing equipment, personal effects etc. You can also ask your agent if the company offers additional add-ons, aka endorsements.

Just like my husband wanted, we’ll have coverage for the boat should it scrape a huge rock.  Unfortunately, it would count as an at fault accident but we won’t have to pay to replace a $5000-ish part out of pocket, just our deductible of $500. Considering we got our boat for free, I’d say that’s a pretty good deal. Also, I hope we don’t run into a hidden rock!

A: 201 Natoma St Folsom, CA 95630

P: (916)985-7500 F: (916)985-7302 T: (916)389-1820

 E: info@amerdiv.com W: www.amerdiv.com

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First blog post

Val Welcome to The Lovely Insurance Lady. This is where I will blog about your personal lines insurance. Insurance is something we all are required to have but HATE talking about it or learning about it. Here I will use my personal stories that somehow always lead back to insurance. My hope is that you will be educated about the insurance you are required to have, and maybe even entertained a bit! Feel free to send me your questions, but remember if you have policy specific questions, changes or billing questions please contact your agent.