Types of Automobile Insurance Coverage

Many people are under the mistaken impression that they have “full coverage” of their vehicle, only to find out after an accident happens that they either lack adequate liability coverage if they are at fault, or that they do not have collision coverage or underinsured/uninsured motorist coverage if the other driver is at fault.

Nevada state law only requires drivers to carry “minimal” liability coverage of $15,000. Many drivers in Nevada, particularly high-risk drivers, carry only this minimal coverage. This coverage may be totally inadequate to compensate you for your past and future medical bills, your pain and suffering, emotional distress, lost income, and other elements of damages you are entitled to under Nevada law. Therefore, it is very important to understand the different kinds of auto insurance coverage, so you are adequately covered in the event you are injured in an accident.

Liability Coverage

Liability coverage insures a driver who is at-fault for an accident that causes property damage or personal injury. The insurer is liable for only the amount of the liability coverage regardless of the severity of injury caused, so if you are at fault for an accident, you may be personally responsible for a judgment against you that exceeds your liability limits. Given the rising costs of health care, a routine hospital stay or visit can easily exceed your liability coverage if you have low liability limits. It is highly recommended that you purchase adequate liability coverage in order to protect you and your family should an accident occur. Your liability limits should be at least $250,000, which will also enable you, in most cases, to purchase umbrella coverage to provide additional liability coverage, in addition to your liability coverage. The premiums for umbrella coverage are quite reasonable, considering the extra protection they provide. In addition, you are entitled to purchase underinsured motorist coverage up to the limit of your liability coverage, so the more liability coverage you have, the more underinsured motorist coverage you can purchase.

Collision Coverage

Collision coverage provides coverage for damage to your car, regardless of fault. If the accident was not your fault, your insurer may pay for your property loss and then seek reimbursement from the other driver’s insurance company. If there is a dispute as to who’s at fault, it may be best to make a property loss claim with your insurance company first so that your car can be fixed. Since this coverage is “no-fault” coverage, it would be wise to make sure you have collision coverage. Another person’s insurance company (called third-person insurance) does not have the same obligation of good faith and fair dealing toward you, and they may unfairly delay payment of your property loss.

Medical Payment Coverage

Medical Payments coverage pays your bills for medical and other accident-related care, up to the amount of medical payments coverage purchased, and regardless of fault  This coverage can be as low as $1000 or as high as $25,000   Unlike most states, there is no obligation in Nevada to repay amounts paid under your medical payments coverage if you recover a settlement from the at-fault driver  This may make it easier to resolve your personal injury case, especially if there is a dispute as to liability. In addition, the at fault driver’s insurance company cannot refuse to pay your medical bills, even they that may have already been under your medical payments coverage, or by any other insurance company (called a “collateral source”)   Therefore, it is a good idea to have medical payments coverage, especially in Nevada.

Uninsured/Underinsured Motorist Coverage

Uninsured/Underinsured motorist coverage will protect you if you are injured in an accident through the fault of another, in the event the other driver either has no insurance or insufficient insurance to cover your injuries. It is important to understand that your liability insurance coverage will not cover you if the accident was not your fault. Many drivers, especially the most at-risk drivers, either have no insurance or minimal insurance. If you are seriously injured by such a person, and you do not have sufficient uninsured motorist coverage, you may well be left “holding the bag” for your medical bills and other damages, even though the accident was not your fault You must avoid this scenario by purchasing adequate uninsured motorist coverage. Do not let your insurance agent tell you that you don’t need medical payments coverage or uninsured motorist coverage. As a practical matter, it is nearly impossible to recover your damages from someone with little or no auto insurance, since they usually have no assets, can homestead their home, or simply file for bankruptcy.

In Nevada, you have the right to purchase uninsured motorist coverage up the amount of your liability coverage. If for some reason you do not want medical payment of uninsured motorist coverage, you must sign a form specifically stating that you are rejecting these types of coverages. If the insurance company cannot produce this rejection form, they may be forced to provide uninsured coverage up to the amount of your liability coverage.