Insurance Policies & Their Impact In Motor Vehicle Accidents

This is no-fault coverage which provides for the repair of your car no matter who was at fault. If your car is leased or financed you must have this coverage. Usually this insurance has a deductible between $100 to $1,000 dollars.

Your own insurance company may suggest to you that you not claim against your own company and instead claim against the other driver's insurance company. This is usually bad advice which can delay getting your property damage fixed. If the other driver was at fault and you claim against your own insurance company your own insurance company will collect what they pay from the other insurance company and even collect your deductible for you. Whether or not your insurance rates get raised will depend largely on who was at fault, not on whether you claimed against your own policy.

2 Types of Collision Insurance:

• Market Value: The most common collision insurance only obligates the insurance company to pay you the market value of your car minus the deductible. This leads to an unhappy situation where your vehicle is almost new but is totaled. Say you pay $30,000 for a brand new car and 3 months later it is totaled. Now your insurance company says, "Your 3 month old car was a used car and is only worth $26,000.
• Full Replacement Cost Coverage (or gap Insurance): Covers the full replacement cost of the vehicle.

This is also no-fault coverage to protect your car if the damage is due to something other than a collision. Comp coverage, for example, would pay for hail damage or theft or vandalism. Making a claim could raise your rates so might consider not making a claim for what could be a small amount of money after the deductible.

You are required to have liability coverage. This coverage protects other people if you cause injury to them or damage their vehicles in a collision at which you are at fault. Liability coverage also protects you because if you become financially obligated to someone else, the liability coverage takes over your obligation provided your conduct was only negligent and not intentional. (Also, if drive drunk and cause and injury your insurance will cover the ordinary damage claim but not a claim for punitive damages.)

However, the minimum amount of liability coverage you are required to have according to N.R.S. 485.185 is only $15,000 for injury or death to one person, $30,000 for injury or death to any number of people in one accident, and $10,000 for damage to property. As you can see this amount of coverage is inadequate.

It is a good idea to buy much higher limits. Some examples of higher liability limit coverages are $25,000 / $50,000, $50,000 / $100,000, and $100,000 / $300,000. In each case the lower number is the maximum liability to any one person injured, the higher number the maximum liability the insurance company has to everyone injured. 

Finally on the issue of liability coverage, if you want high limits your insurance agent will probably sell you an umbrella policy which supplements your regular liability limits. Your regular liability policy might have limits of $50,000 / $100,000 and then you might have an umbrella policy that in effect raises each limit to $1,000,000.

This insurance means that if another driver injures you and does not have sufficient liability coverage to compensate you, your own insurance company will compensate you up to the combined amount of your own uninsured / under-insured coverage plus whatever liability coverage the other driver may have. Your own insurance company must offer you according to N.R.S. 687B.145(2) uninsured / under-insured coverage in an amount equal to the liability limit you purchase. You can reject the offer.

Important note: under N.R.S. 687B.145(5) if you buy an umbrella policy for liability coverage, your insurance company is NOT obligated to offer you uninsured/under-insured motorist coverage in the same amount.

This uninsured / under-insured motorist coverage also protects you under N.R.S. 690B.020 in the event that you are hit by a hit and run driver or in the event that the other driver's insurance company goes bankrupt and can't pay you. In addition, most liability insurance only covers the insured driver and people using the vehicle with the permission of the insured driver. If someone uses an insured vehicle without the permission of the insured driver the liability coverage does not apply. This happens when the vehicle is stolen and sometimes happens when a friend or relative takes the vehicle without the owner's permission. (When a friend or relative uses the vehicle without express permission there is often an issue as to whether permission was implied.) If you are in a collision which is not your fault and the other driver was using an insured vehicle without the owner's permission, your uninsured motorist coverage will compensate you.

A great additional benefit of uninsured / under-insured motorist coverage is that it oftentimes covers the insured when the insured is a passenger in a vehicle driven by another, and even when the insured is a pedestrian. Additionally, this coverage also applies to most people in the insured driver's house such as children.

Additional Note:

Interpreting N.R.S. 687B.145 and N.R.S. 690B.020 together is a bit confusing. According to an article in the Nevada Justice Association's Nov-Dec, 2010, issue of The Advocate by Mark C. Wenzel this offer of uninsured / under-insuredmotorist coverage must be in writing and must be made in writing every time the policy is renewed. I agree with Mr. Wenzel. This means that if you have liability insurance but not uninsured / under-sinsured motorist coverage your attorney may be able to force your insurance company to give it to you after your accident if the insurance company cannot prove that they offered you this coverage in writing both when you first got the policy and at every renewal of the policy.

Medical Payments Coverage (Med Pay) pays for your medical expense if you are involved in a car accident. If you are the victim of a car accident and the other driver is at fault you can legally and ethically collect twice for your medical bills if you have med pay (once from your own med pay and once from the other driver). There is no other situation with auto insurance that allows for this double collection.

If we represent you and you have med pay, we demand that your insurance company either pay the full amount of the med pay coverage to you--common if the coverage has a limit of $1000 or $5000 and your bill exceed that amount--or not make any payments until further instructions from us. Here's why: Let's say you go the Emergency Room and you have health insurance and $1000 in med pay coverage. The Emergency Room doctor bills $950 to med pay. Your insurance company pays it. Now your med pay is almost all gone. Instead if your health insurance company had gotten the bill, they probably would have chopped it to $200. Although we would have to pay the health insurance company back out of the settlement (in most but not all cases), we would probably pay them back at a discounted $160. Spending $160 instead of $950 for the Emergency Room doctor is a big saving that lets you recover more.

Thus, med pay coverage can help you collect more if you are not at fault for a collision, and it can pay some of your bills if you are at fault. However, because of the low limits, med pay is not for everyone. You might want to use money you would spend on med pay coverage to buy increased uninsured / underinsured motorist coverage, especially if you already have health insurance.