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 amassive 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.
Steve is the Managing Shareholder of Steven J. Klearman & Associates, a civil litigation law firm located in Reno, Nevada. He practices primarily in the areas of civil litigation and injury law, and has authored one of the definitive guides to Nevada civil law that is widely used by Nevada judges and attorneys, his book entitled Elements of Nevada Legal Theories.