INSURANCE (VERY) BASICS
I truly love what I do. My team and I love helping people. But truth be told, it can be frustrating at times for a number of reasons (and what job isn’t from time to time). But this is one of the most common sources of my frustration. It’s when I first meet a new client. They are almost always very nice. They are good, hard working people. We talk about a number of issues in our first meeting, including their insurance. Invariably I hear them say: “Don’t worry, I have full coverage.”
Many people believe because they have “full coverage” that their insurance will reimburse them for medical treatment, lost wages, pain and suffering, or any other damages. Unfortunately, this is far from the truth. “Full Coverage” is a misnomer. It doesn’t exist. When insurance agents us the term “full coverage” they are inartfully trying to tell you that you have the minimum insurance coverage to legally drive in Nevada. As a driver here in Nevada you are required to carry a liability insurance policy. The minimum limits for bodily injury are $25,000 per person/$50,000 per accident. For property damage the minimum limit are $20,000.
Liability insurance protects everyone you harm if you cause a crash. For example, if you cause a crash where one other person is involved your insurance will pay up to $25,000 for that person’s medical bills, pain and suffering, and lost wages. Your insurance would pay up to $20,000 for the property damage you caused to their vehicle or property in his or her vehicle. If the crash involved more than one other person, your insurance would pay no more than a total of $50,000, with each person entitled to no more than $25,000. Your liability insurance does not pay for your medical bills, pain and suffering or any other element of your damages.
Fortunately, there are coverages you can have added to your policy that protect you. The first and most important is Uninsured/Underinsured Motorist. In Nevada, Underinsured and Uninsured Motorist are the same thing. They are commonly referred to as UM or UIM insurance. By law, your insurance agent must offer this coverage to you. If you reject the coverage your agent must have you sign a rejection form.
Here is how UM/UIM work: You are in a crash that isn’t your fault. Your medical bills are $30,000. The person that caused the crash only has the state minimum $25,000 in liability coverage. In that instance, the person at fault for the crash is “underinsured.” They don’t have enough coverage to cover your injuries. If you have $25,000 in UIM coverage you can look to your insurance carrier to pay for the remaining medical bills and to reimburse you for the pain and suffering and any lost wages you experienced. Without having UM/UIM coverage you would be out of luck and limited to a maximum of $25,000 recover even though your medical bills are $30,000.
In addition to UM/UIM you may opt to purchase medical payment coverage or “Med Pay.” This acts like health insurance. For example, if you have $5,000 in medical payment coverage on your policy, your insurance company will pay up to $5,000 in reasonable and necessary treatment if you are injured in a crash.
Insurance coverage is something most of us only think about once it is too late. Take ten minutes and call your agent. Check your policy for UM/UIM or “Med Pay” coverage. If you don’t have them, consider getting them- especially UM/UIM. The premiums generally don’t add too much to the policy. And as the old saying goes, an ounce of prevention is worth a pound of cure.
For more information on types of coverages available, call your insurance agent or take a look at the following information from the Nevada Division of Insurance https://doi.nv.gov/Consumers/Automobile-Insurance/.