While car insurance is required of every driver nationwide, you can do
yourself a favor by paying for more than the bare minimum of coverage.
There are two main types of optional coverage drivers can buy: medical
pay and uninsured/underinsured motorist insurance. You should have at
least $10,000 in med pay coverage—it supplements your health insurance
and can be a
massive lifesaver when it comes to life-altering injuries.
UM/UIM insurance is also a must. Because Nevada has a low liability insurance
minimum ($15,000), it can be argued that
every driver in Nevada is underinsured. If you want to make sure that you get
the medical and financial resources you need after an accident, you’ll
need UM/UIM coverage. Similarly, you should consider paying more for the
most important coverage you have: third-party liability insurance.
Why You Need More than $15,000 in Liability Insurance
Here’s the issue with the $15,000 minimum—that barely covers
a single visit to Renown (the only Level II trauma center in the Reno
area). After a bad accident, it’s highly likely that the other party
in the accident may sue you for more money, whether or not it was your
fault. If you have something to lose, then it’s worth paying for
coverage beyond just $15,000 of auto insurance.
Here’s how it works:
If someone sues you after an accident, your liability insurance represents
how much money your insurance company will be obligated to pay them in
the event that you are found at fault. If someone needs more than your
insurance provides, then
you’re on the hook for it. Liability insurance, put simply, is a shield between your personal belongings
and a plaintiff. If you don’t have much savings and your assets
aren’t worth much, then you don’t need that much liability
insurance—the $15,000 minimum is enough for you because you don’t
have much to lose.
However, if you have significant assets (like a home, savings, or anything
that contributes to your net worth), then $15,000 will hardly stop someone
from suing you. After all, would
you settle for $15,000 if there was a chance that you could win 10 times that
amount in court? Higher coverage means your potential claimant will have
an incentive to settle—leaving you and your assets alone.
Yes, minimum coverage is affordable—but losing a massive lawsuit
potentially costs more than extra coverage. That’s a fact. Do yourself
a favor and pay for an umbrella policy as soon as possible.