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It is mandatory in the state of Nevada for all motorists to carry a minimum amount of liability insurance or proof of financial responsibility. All vehicles must be insured, and you must carry proof of this insurance at all times in the vehicle. This proof often is in the form of an insurance card that your insurance company will give to you.
Why should I be insured?
Your insurance protects you against financial loss if you get involved in a traffic crash. The insurance policy is a contract between you and your insurance company where you agree to pay the premium (the cost of your policy) and the company agrees to pay for your losses. The policy you purchase defines your coverage, or what the company will pay for in a traffic crash. For example, if you have a policy that covers $10,000 in damages that you cause, the insurance company will pay up to $10,000 of your costs, which you don't have to pay out of your pocket. No, you won't be paying $10,000 to get that amount in coverage; you only need to pay the premium. That's a good bargain!
In addition to the savings, you also must be insured in order to:
- Register your vehicle and obtain a Nevada license plate for it;
- Renew or replace your existing Nevada vehicle registration; and
- Legally drive your vehicle.
What is liability insurance?
Liability insurance pays for losses that are your responsibility. There are two types of liability insurance that you must get in Nevada:
- Bodily Injury Liability. This pays your legal costs and claims against you if you injure or kill someone with your car. Often it will cover family members who live with you and anyone who is driving with your permission.
- Property Damage Liability. This pays your legal costs and claims against you if you damage someone else's property with your car. It does not cover your property, including your car.
How much coverage must I get?
The following is the minimum amount of liability coverage you must have:
- $15,000 for bodily injury or death of one person in any one collision.
- $30,000 for bodily injury or death of two or more people in any one collision.
- $10,000 for injury to or destruction of property of others in any one collision.
These are typically written as three numbers: 15/10/30. Remember that these amounts are just the minimum. You should get more coverage if you can afford to do so. Before you purchase insurance, make sure the insurance company you choose is licensed to do business in Nevada. Once you have chosen a policy, your insurance company is required to electronically transmit your insurance information to the Department of Revenue's (DOR) Motor Vehicle Division (MVD) within 30 days of the date your coverage is to begin.
Driving Without Insurance
When DMV identifies a vehicle as a possible uninsured vehicle, they send the registered owner a letter asking him or her to show proof of financial responsibility. If you are the vehicle owner and do not respond or if the insurance company denies coverage, your vehicle registration will be suspended. You will be asked to surrender your vehicle license plates. It is illegal to operate a motor vehicle in the State of Nevada without insurance.
To reinstate your vehicle registration, you will need to show current proof of insurance and pay a $250 reinstatement fee. If the vehicle was non-operational during the period in question, you must provide documentation to verify this. You will then only need to pay a $50 reinstatement fee and also show proof of insurance.
* Note: If you receive a verification request, remember the documents are time-sensitive, so complete and return the form immediately.
If you cancel your auto insurance, you must also cancel your Nevada vehicle registration and surrender your license plates. You must have insurance at all times when driving.
Financial Responsibility and Accidents
The following provisions apply to the financial responsibility laws if you are involved in an accident:
- If a law enforcement officer investigates the accident, your insurance information and a description of damages or injuries will be sent to the state's financial responsibility section.
- If you are involved in an accident that causes $750 or more in damages, you must complete and send in a Report of Accident Form (SR-1), within ten days.
- If anyone is injured in an accident, you must also forward a SR-1 within ten days.
- You must complete the SR-1 form if you are either the registered owner or the driver of the vehicle.
- You must fill out the SR-1 form even if you are the only one involved in the accident.
- You can get a SR-1 form from any Drivers License Office, a Nevada Highway Patrol office, or a local law enforcement agency.
- The financial responsibility department will determine: who was at fault, if all vehicles involved were insured, and the total amount of liability.
If you are involved in an accident, found to be at fault, and do not have liability insurance:
- Your driver's license and/or vehicle registration will be suspended.
- You will need to post a deposit to cover the costs of the accident.
- You will need to make arrangements with the other parties involved to cover damages or injuries.
If you do not report an accident, your driver's license and/or your vehicle registration may be suspended.
Types of Auto Insurance
In Nevada, you are only required to have bodily injury and property damage liability insurance. But you have the option of purchasing more insurance to protect yourself financially. Although they are not required, they may help to protect you even more. They do cost money, and you will have to pay a predetermined amount for the deductible, which is the amount you must pay before your insurer pays for your claim. Most auto insurance companies offer these types of coverage in additional to liability:
Collision - This pays for damages to your vehicle caused by a collision, regardless of who is at fault. You may be required to get this coverage if you have a leased car or it is financed. You should get this anyway if your car is a recent model or worth at least $4,000.
Comprehensive Physical Damage - This pays for damages to your vehicle caused by fire, hail, floods and other "acts of God", as well as vandalism, theft, and collisions with deer. You should get this if your car is a recent model or worth at least $4,000.
Uninsured or Underinsured Motorist - This pays for all costs related to injuries or property damage to you or your passengers caused by an uninsured, underinsured, or hit-and-run driver. Even though Nevada requires all drivers to have liability insurance and insurers to report when a driver terminates coverage, some may slip through the cracks. If an uninsured, underinsured, or hit-and-run driver damages your car, you will be stuck with the bill (or most of the costs if the driver is underinsured). If you can afford it, you may want to get this coverage.
Medical Payments - This pays for any medical expenses for you and your passengers that result from a traffic crash. It also pays for your medical expenses while you are a passenger in another car or while walking. This coverage is good to have because it pays regardless of who is at fault, which allows you to get treatment without waiting for your case to settle.
Car Rental Reimbursement - This pays for a rental car up to a specified amount per day while your car is being repaired as a result of a traffic crash. It usually covers rent payments for up to 30 days. This coverage usually adds only a few dollars to your policy.
Towing and Labor - This pays for towing and labor charges up to a specified amount when your car breaks down. Automobile clubs also offer this service, so you may not need this if you are a member of one.
Choosing an Insurance Company
The insurance company you choose must be authorized ("rated" or "admitted") to do business in the State of Nevada. You need to be aware that many insurance companies in Nevada that are not approved still choose to offer liability insurance to drivers. The rated or admitted companies have met all the requirements and guidelines as prescribed by the insurance commission and are consequently rated for reliability, among other factors. Motorists insured with admitted companies are dually covered by a fund controlled by the state. This fund covers them in case their insurer becomes insolvent during a pending claim. Admitted companies contribute to this fund, while non-admitted companies do not.
It is your responsibility to ensure that your own insurance company or underwriter complies with state regulations. Coverage with an insurance company that is non-admitted exposes you to the risk of nonpayment of claims and insufficient overall coverage. If you are not sure about the insurance company you have chosen or are considering, you can call Nevada's Insurance Verification Program at 1-888-467-4195. The Insurance Verification Program is a computerized system that also checks registration records for vehicles without liability insurance.
Saving on Insurance
Keep in mind that the minimum liability coverage required by the State of Nevada may not sufficiently protect you. Sure, you may have paid $500 less than your friend each year on liability insurance, but before you congratulate yourself for saving some money, consider that your friend may be adequately protected while you are not. Any damages that exceed the limits of your policy will come out of YOUR pocket. The savings you think you obtained by purchasing the minimum amount of coverage will be wiped out by the extra costs you will have to pay beyond what your insurance covers. Consider purchasing the highest level of liability coverage that you can comfortably afford to protect your property and assets. Remember that if you ever get involved in a collision, the issue will not be how much you saved on your insurance but whether or not you have enough coverage.
Now, how can you save on insurance while still being adequately covered?
- Shop around. Insurance premiums can vary from insurer to insurer for the exact same type of coverage. However, be sure to research an insurance company before purchasing a policy.
- Increase your deductible. Although a higher deductible means you have to pay more out-of-pocket, you'll save on your premium in the long run.
- Don't get collision or comprehensive coverage (old cars). The repair costs can easily exceed the value of your vehicle if it is old or is not worth very much (less than $1,000).
- Don't get medical payments coverage. If you already have sufficient health insurance, you do not need medical coverage under your auto insurance.
- Don't get a car that is high-profile. Your insurance rates will be higher if you have certain types of cars such as sports cars or SUVs which are expensive to repair and popular with thieves. Small and midsized sedans and minivans tend to be the cheapest to insure.
In addition, many insurers offer discounts if:
- You are a full-time student with a "B" average or better.
- You drive less than 7,500 miles a year.
- Your vehicle has an anti-theft device such as "Lo-Jack".
- Your vehicle has airbags or other safety devices.
- You have no violations or collisions on your driving record.
- You have more than one vehicle under the same policy with the company.
Many factors affect the way you drive... you know that, and so do the insurance companies. Listed below are many of the variables that affect how you drive and the reasons why they may work against you when your insurance rate is calculated.
Age - Statistics show that both old and young drivers have a higher probability for collisions than do the middle-aged. Numbers verify that teenagers are involved in a substantially higher number of fatal and nonfatal crashes than other drivers largely due to their lack of experience. The often transient lifestyle, attitude, and lack of maturity of those under 30 also contribute to collisions. Senior citizens are higher risks to insure because as they grow older, their reaction time slows down and a subtle, gradual deterioration of motor skills and abilities occurs behind the wheel.
Type of Car - Vehicles with high market values and sticker prices mean larger insurance premiums because they are more expensive to replace. Furthermore, certain vehicles are more prone to theft due to the high demand of their replacement parts. Sports cars are often quite cost prohibitive to insure because they are purchased for their power, handling, and speed... a formula that may also lead to a collision.
Motor Vehicle Record - It is proven that prolonged unsafe driving will lead to traffic citations and collisions. Since collisions lead to insurance claims, a poor driving record is a good way to see your insurance rates soar. A historical record of traffic collisions or citations will lead to substantial increases in insurance rates.
Marital Status - Statistically, single people are more likely to be involved in traffic crashes than those who are married. Companies know this fact and rate people accordingly.
Smoker/Nonsmoker - People who smoke are more likely to have higher insurance rates than those who do not. Smokers do not always keep both hands on the steering wheel, so they are in less control of their vehicles. They may also drop hot ashes, a lit match, or a lighter that can result in a collision or loss of vehicle control. As a result, insurance rates tend to be higher for smokers because the likelihood of a collision is greater.
Location - It is a fact that in certain Nevada cities, over 50% of all drivers on the roadways do not have insurance. The chances of involvement in a collision with an uninsured motorist are thus higher in these cities. Other areas may have high traffic density and a greater number of traffic collisions. Insurance companies will base premiums on these factors and the probability of a claim deriving from the city in which you live.
Your Responsibility in a Collision
A collision or crash is where you injure yourself or another person or cause any property damage while driving your vehicle. A collision can occur with another vehicle that is in motion or even a parked vehicle. Leaving the scene of any collision is a CRIME! The following are things you must do if you get involved in any collision:
- The first thing you must do is STOP at a safe place near the scene. If your vehicle is in a place where it may cause another collision, then move it. If the vehicle is not in a dangerous spot, leave it there until a law enforcement officer tells you to move it. In an accident involving only property damage, you must move your vehicle out of traffic if you can do it safely.
- If anyone is hurt in a collision, call for an ambulance right away. Don't move any person who is injured, but you should keep a victim in shock as warm as possible. If there is no pulse, a properly trained person should administer CPR.
- Call the police.
- Warn other drivers who may be approaching if you can do it without putting yourself in jeopardy. If it is night or the weather is bad, use flares, reflectors, or flashlights.
- Exchange the following information with all involved parties: your name, your address, your driver's license number, vehicle identification number, license plate number, the name of your insurance company, and policy number.
- If you are involved in a collision and damage an unattended vehicle or other property, you must either find the owner or provide the above listed information on a note and leave it in a conspicuous place where it can be easily seen.
WHAT DO YOU THINK? Some experts recommend carrying a camera in your vehicle that you can use in case you get involved in a crash. What do you think are some of the benefits of taking your own pictures of a collision scene?