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Understanding Auto Insurance

What is auto insurance?

Auto insurance is a product that provides financial protection for cars, trucks, motorcycles, and other road vehicles from loss, physical damage and/or bodily injury liability resulting from traffic collision, theft or other losses.

By law, all drivers in Nevada must purchase auto insurance.

How much auto insurance am I required to have in Nevada?

Nevada drivers are required to have protection levels of at least $15,000 per person for bodily injury, $30,000 per accident for bodily injury, and $10,000 per accident for property damage. This minimum level of coverage is often referred to as 15/30/10. It is possible to purchase more coverage protection than the minimum level of coverage required.
Liability insurance coverage protects you only if you are liable for an accident and pays for the injuries to others or damages to their property. It does not provide coverage for you, your passengers, or your property. Property Damage coverage is also available but is a separate coverage and is not required by law.

What other types of coverage can I buy?

Drivers who want to protect their vehicles against physical damage can need to purchase:

  • Collision – This coverage is for damage to your vehicle resulting from a collision, regardless of who is at fault. It provides for repair of the damage to your vehicle or a monetary payment to compensate you for your loss.
  • Comprehensive – This coverage insures you against theft or other damage to your vehicle resulting from causes other than collision. Other causes may include damage from wind, falling objects, fire, flood or vandalism.

None of the above insurance coverages will pay for your injuries or your passengers’ injuries in the case of an accident.

The following two coverages help ensure that everyone in your vehicle has the protection needed to pay for medical treatment costs.

  • Uninsured / Underinsured Motorist (UM/UIM) - If you or your passengers are injured in an accident in which the other driver is at fault and either does not have insurance (uninsured) or does not have enough insurance (underinsured) to pay all of your loss, this coverage pays for the medical costs of you and your passengers.
  • Medical Payments (Medpay) - This pays for treating injuries to you and your passengers without regard to fault. It also pays for treating injuries resulting from being struck as a pedestrian by a motor vehicle.

What is a deductible?

Your auto insurance deductible is the amount of money you must pay out-of-pocket before your insurance compensates you. A deductible only applies to Collision and Comprehensive coverages.

For example: You have a Subaru Outback that has Collision Coverage with a $1,000 deductible. You rear end another driver, and your Subaru is damaged. You take it to the body shop and the total cost to repair all the damage is $6,500. In this scenario, you would pay the body shop $1,000. This is your deductible. Once you have met your $1,000 deductible the insurance company will pay the remaining $5,500.

How does my deductible affect the cost of my insurance?

Generally, the lower your deductible, the higher the cost of your insurance will be. The higher your deductible is, the lower the cost of your insurance will be. This is because the insurance company is assuming more or less liability for repair costs.

How do I buy auto insurance?

When buying insurance, the Division of Insurance recommends that you seek the advice of a qualified insurance professional. There are three types of professionals that typically sell insurance:

Independent agents: can sell insurance from multiple unaffiliated insurers.

Exclusive agents: can only sell insurance from the company or group of companies with which they are affiliated.

Direct writers: are insurers that do not always use agents as intermediaries; instead, some of their employees are licensed as agents in Nevada and are authorized to sell insurance.

Regardless of what type of professional you choose to use, it is important to confirm that they are licensed to conduct business in the State of Nevada. You can check the license of an insurance professional or company here.

Remember – Always verify that an insurance company or agent are licensed before giving them personal information or payment.

How much should I expect auto insurance to cost?

Insurance companies look at a number of different factors when determining the cost of your insurance. These factors include, but are not limited to:

  • Driving record
  • Claims history
  • Where you live
  • Gender and age
  • Marital Status
  • Make and model of your vehicle
  • Credit

Nevada has one of the most competitive and healthy auto insurance markets in the country. Shopping for insurance may allow you to achieve competitive pricing.

To learn more about how insurance companies determine the cost of your auto insurance, you can read our Consumer’s Guide to Auto Insurance Rates.

To learn about the use of your credit information by insurance companies read our Frequently Asked Questions About Credit-Based Insurance Scores.