January 22, 2013
Most states, including Nevada, California and Arizona, require motorists to carry auto insurance. Auto insurance is a contract between a motorist and an insurance company that stipulates the amount of money that will be provided in the event of an accident for matters relating to medical care, property repair and liability to third-parties. Generally speaking, auto insurance coverage follows the vehicle rather than the person that has the insurance. In practical terms, what this means is that even a passenger in a car will have rights under an insurance policy even though the passenger never entered into any contract with the insurance company.
Categories Of Auto Insurance
- Bodily Injury Liability Insurance: This type of coverage reimburses and compensates others for medical expenses for bodily injuries resulting from an accident caused by you. Thus, this coverage protects you from claims by other motorists, passengers in your vehicle and pedestrians.
- Medical Payments Coverage: Also commonly referred to as “med pay.” The law does not require that you carry med pay coverage but it is foolish not to. Med pay is a supplemental form of coverage whose cost is minimal compared to the benefits provided. Let’s say you get in an accident and you get the run around from the insurance company for whatever reason, med pay coverage will provide you with instant cash to deal with injuries and other needs following an accident. The beauty of med pay is that you get immediate money regardless of fault. Also, the coverage travels with you so that if you’re riding in a friend’s car or happen to be on public transportation when an accident occurs, you still get coverage. While auto insurance follows the vehicle, med pay follows the person who holds the policy. At Paul Padda Law, PLLC, we strongly encourage our clients to add med pay to their insurance policy. It might be one of the smartest things you can do to protect yourself. To learn more about med pay, see our blog post from January 1, 2012.
- Property Damage Liability Insurance: This type of coverage provides payment for damages, either repairs or replacement, to another person’s car or property if you cause an accident. While it also covers your own vehicle, the law requires you carry coverage to address the damage done to another person’s property.
- Uninsured/Underinsured Motorist Bodily Injury Insurance: What happens if you are injured by a person driving a vehicle who has no insurance or not enough insurance to cover the costs associated with your injuries? This type of coverage addresses precisely that situation. Often referred to as “UIM” coverage, this type of insurance can be essential in helping you pay your bills in the event of a major accident caused by someone with the minimal coverage. Getting behind the wheel always carries risk. This type of coverage helps you address the risk caused by others with inadequate insurance.
What The Law Requires
Nevada law requires that motorists carry a minimal amount of insurance. Specifically, the minimal requirements are as follows:
- Bodily Injury / Death Liability of one person $15,000
- Bodily Injury / Death Liability of two persons $30,000
- Property Damage $10,000
The coverage requirements under both California and Arizona law are the same except California only requires $5,000 in property damage coverage.
A person who fails to carry the required state minimum may have his or her driving privileges suspended. They could also face an initial $500 fine and be required to carry a special “financial responsibility certificate” issued by the Department of Motor Vehicles for 3 years.
Manage The Risk
A road is an uncertain place populated with drunk drivers, young drivers, sleep impaired drivers who work irregular hours and aggressive drivers. Having the right insurance policy will not eliminate the risk of being in a car accident but it will give you peace of mind and access to appropriate compensation in the event of an accident.
At Paul Padda Law, PLLC, we tell all of our clients that having the right insurance is not just smart it could make the world of difference in your life following an accident. If you carry the minimum policy ($15,000) and you’re injured by someone with the minimum policy ($15,000) resulting in a major life-impairing injury, your range of compensation will be $30,000 at most. If you’re facing the prospect of hundreds of thousands of dollars in medical bills or maybe never being able to walk again, do you think $30,000 will be enough? Of course not!
Having the right amount of car insurance coverage is simply a matter of putting yourself in the best possible position in the event the unthinkable happens.