Does Full Coverage Cover At-Fault Accidents?

“Full coverage” car insurance is a common term, but it’s not a single product. Instead, it’s a combination of various coverages. Understanding these components is important to clarify how damages and injuries are addressed when the policyholder is responsible for an accident. This article will explain these components and their roles in at-fault scenarios.

Understanding “Full Coverage”

“Full coverage” in auto insurance refers to a policy that combines several distinct types of protection. It generally includes liability coverage, which addresses damages to others, and physical damage coverages, which protect your own vehicle.

A typical “full coverage” policy often comprises these key components:
Bodily Injury Liability (BI) coverage helps pay for medical expenses, lost wages, and pain and suffering of other individuals injured in an accident you cause.
Property Damage Liability (PD) covers damage to other people’s property, such as their vehicle or other structures, when you are at fault.
Collision coverage pays for repairs or replacement of your own vehicle if it collides with another vehicle or object, regardless of fault.
Comprehensive coverage protects your vehicle from non-collision events, including theft, vandalism, fire, natural disasters, or impacts with animals.
Medical Payments (MedPay) or Personal Injury Protection (PIP) cover medical expenses for you and your passengers, irrespective of who caused the accident.
Uninsured/Underinsured Motorist (UM/UIM) coverage offers protection if you are involved in an accident with a driver who has insufficient or no insurance.

Liability Coverage for At-Fault Accidents

When a policyholder is at fault for an accident, the liability components of their “full coverage” policy activate, covering damages and injuries to other parties. Liability coverage is mandated in most jurisdictions to legally operate a vehicle.

Bodily Injury Liability (BI) coverage pays for medical treatment, rehabilitation, lost income, and pain and suffering of individuals injured in an accident you cause. It also helps cover legal fees if the injured party pursues a lawsuit. Policy limits are maximum payout amounts, typically stated as a per-person and a per-accident limit. For example, limits might be $25,000 per person and $50,000 per accident.

Property Damage Liability (PD) coverage addresses the cost of repairing or replacing another person’s property damaged in an at-fault accident. This includes damage to their vehicle or structures like fences. Similar to BI coverage, PD liability also has specific limits, such as $25,000 per accident. If damages exceed these limits, the at-fault driver may be personally responsible for the remaining costs.

First-Party Coverages for At-Fault Accidents

In an at-fault accident, specific components of a “full coverage” policy protect the policyholder, their vehicle, and passengers. These coverages ensure that damages to your property and injuries to those in your vehicle are addressed. They function independently of liability coverage, which focuses on other parties.

Collision coverage directly protects your own vehicle in an at-fault accident. This coverage pays for the repair or replacement of your car after it hits another vehicle or object. A deductible applies to collision claims, which is the amount you pay out-of-pocket before insurance coverage begins. For example, with a $500 deductible on $3,000 in damage, your insurer would pay $2,500.

Medical Payments (MedPay) or Personal Injury Protection (PIP) pay for medical expenses for you and your passengers, regardless of fault. MedPay typically covers medical bills and hospital visits. PIP, available in some states, can also cover lost wages and essential services if injuries prevent daily tasks. These coverages offer immediate financial assistance for injury-related costs.

Common Exclusions and Specific Scenarios

Even with “full coverage,” an auto insurance policy might not provide coverage or its application could be limited in certain at-fault accident situations. These exclusions are typically outlined in the policy language.

Intentional acts are generally not covered. If a policyholder intentionally causes damage or injury, the insurer will likely deny claims for their own vehicle and may not cover liability to others. Similarly, if a driver explicitly excluded from the policy causes an accident, the insurance company will typically not pay for damages or liability. This exclusion is often used to manage risk or reduce premiums.

Driving under the influence (DUI) presents a complex scenario. While liability coverage often still pays out to third parties for damages and injuries they sustain in a DUI-related accident, the insurer might seek reimbursement from the policyholder. Specific coverages for the at-fault driver’s own vehicle or injuries may be denied, and the policyholder can expect significantly increased premiums or non-renewal. Coverage may also be denied if the vehicle was used for commercial purposes without an appropriate commercial insurance policy.

If total damages or injuries in an at-fault accident surpass the maximum payout specified in the policy, the policyholder is personally responsible for the difference. Misrepresentation on the insurance application, such as providing false information, can lead to claims being denied or policy cancellation. If a regular driver of the vehicle is not listed on the policy, coverage could be impacted or denied if that unreported driver causes an accident.