What do Santa, the Easter Bunny and full coverage auto insurance have in common? None of them exist. I know some of you're thinking:
"I have full coverage auto insurance. What do you mean it doesn't exist?"
The term refers to a handful of coverages that are bundled together to create a basic auto insurance policy. While some coverage options vary from company to company, a basic auto policy, or "full coverage", in California consists of the following:
Liability Coverage
This type of coverage pays for damages and injuries to other parties that YOU ARE LIABLE FOR. It does not provide any protection for damages or injuries to you or your vehicle.
The state of California requires all drivers to have liability insurance at all times with minimum coverage limits of $15,000/$30,000/$10,000. But what do those numbers even mean? These amounts are the amount of money that your insurance company will pay out in the event of accident you cause.
$30,000 total amount insurance company will pay per accident for injuries to other parties
Collision Coverage
This type of coverage pays for damage to your car from an accident with another car or a physical object, such as a deer minus your deductible.
Comprehensive Coverage
This type of coverage pays for damage to your car from events other than a collision, such as theft, fire, or vandalism minus your deductible.
(A deductible is the portion you pay for damages to your vehicle in the event of a claim and typically ranges from $250-$1000. The most common deductible amount is $500)
Personal Injury Protection and Medical Payments
This is coverage helps pay for hospital bills and medical care expenses for you and your passengers if you’re injured in an accident, no matter who was at fault.
Optional coverages are available and may include:
Towing/Roadside assistance
Rental reimbursement
OEM (Original Equipment Manufacturer)
Glass coverage
Vanishing deductibles
Another optional coverage that all carriers offer is
Uninsured/Underinsured motorist coverage.
This type of coverage pays for damages you are legally entitled to recover from a driver without liability insurance or a hit-and-run driver or for an amount that exceeds an at-fault driver’s insurance limits
Although it is not required by law and may be rejected, it isn't something
you should skip to save a few bucks.
So how much does all this cost?
The Zebra lists the average annual premium for auto insurance by age for drivers with no tickets or accidents
AgeAverage Yearly Premium
16 - $7,175.12
17 - $6,853.99
18 - $6,021.14
19 - $4,428.57
20s - $2,416.70
30s - $1,618.56
40s - $1,563.19
50s - $1,449.50
60s - $1,408.62
70s - $1,568.61
These rates get substantially higher and in some cases almost double after your first accident.
This might seem like a lot of money and at face value, it is. But before you skim off coverage to save a couple bucks take a look at how much an accident could cost:
Carpenter, Zuckerman and Rowley list some average medical costs based on bills from Cedar-Sinia hospital that might make you want to think twice before turning down that extra coverage. Included in that list were:
Chest Trauma: $127,000 - $162,000
CT Scan: $4600 - $5500 (depend on what part of the body)
ER Visits: $3300 - $7100
MRI: $10,600
But it doesn't end there. California personal injury law firm Jackson and Wilson have obtained millions from people after an auto accident according to their website. In one of their cases, a $2,000,000 judgment was made in favor of a motorcyclist who lost his leg after being hit a driver under the influence. Another case involving a teenage driver paid out $1.48 million to a passenger who sustained a broken pelvic bone after a collision.
Those are just a couple of extreme cases. Not all car accidents will result in million dollar lawsuits. Another personal injury law firm, Tavss Fletcher, provides the estimated cost of an accident based on information from the National Safety Council:
The total estimated cost per death in an accident is: $1,130,000
The total estimated cost for each disabling injury is: $61,600
The total estimated cost for property damage is: $7500
Still trying to take it all in? Relax. Maybe this picture of a cute dog smiling will help:
Not all hope is lost. Most insurance companies have an array of available discounts that you may qualify for even if your driving record isn't perfect. Here's some ways you can become eligible for discounts on your auto insurance:
Bundling your home and auto or adding a renters policy is a great way to qualify for discounts of 15% or more on your auto insurance
Adding a second vehicle to your existing auto policy
Remain accident and ticket free for at least three years
If you're the parent of a teen driver with good grades (3.0 or higher), you are eligible for a good student discount
Certain professions such as: law enforcement/fire department, teaching or certain engineering degrees may make you eligible for certain discounts as well
What discounts are available will depend on the company. Talk to an agent to find out what you may be eligible for.
The road to a better insurance policy is out there.
It's up to you to find it