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By many estimates, 80% of accidents occur when a driver is distracted. Between damage to the vehicles involved, medical bills and any other property damage that may occur, a single car accident can add up to a hefty bill – a bill that most drivers will not be able to cover if they are responsible for a collision.
For this reason, most states require that their drivers carry liability auto insurance. Keep reading to learn more about this type of coverage and to determine whether the minimum limits are enough for you.
As a Nevada driver, the minimum amount of insurance that you legally have to carry helps cover the costs of any bodily injuries or property damage that results from a collision that you caused. This type of insurance exclusively covers the damages done to the driver that you hit; it does not cover any repairs to your own vehicle, nor can it be used for your own medical bills or lost wages.
Bodily injury liability coverage covers any hospital bills, funeral and burial expenses, loss of income and pain and suffering incurred by the person that you hit. This type of insurance may also be used to cover legal fees if you are sued.
If you are responsible for a car accident, then the property damage coverage would pay for repair or replacement costs for the other person’s property. This could include their vehicle, anything that you hit on their personal property, such as a fence or mailbox, or any belongings inside of their vehicle.
Once again, it’s important to note that liability coverage is used to bring the other person, not you, back to pre-accident condition. Collision or comprehensive insurance can be added to your policy to ensure that in the event of an accident, your own repairs and medical bills will be covered.
Generally, liability coverage is expressed in three numbers. In Nevada, minimum coverage is 25/50/20, meaning that drivers are required to carry insurance that will cover $25,000 of bodily injury for one person, $50,000 of bodily injury for multiple people and $20,000 of property damage.
$25,000 may sound like a lot of money, but if you hit another vehicle and the driver suffers extensive injuries that will require hospitalization and surgeries and result in lost wages, you will quickly reach your policy limit. Those bills multiply exponentially if you’re responsible for injuring multiple people. Likewise, if you hit and total a $50,000 vehicle, your liability coverage will only put a dent in the amount that you will be legally responsible to pay. Unless you are prepared to pay tens or even hundreds of thousands of dollars to cover any damages that result from an accident that you cause, a single collision could spell financial ruin.
When choosing how much liability insurance you need, it’s important to get enough to protect yourself and your assets if you are responsible for an accident. This is not an area to cut corners; if you are underinsured, a single accident could end up bankrupting you. Most experts recommend $100,000/$300,000 in coverage, but depending on your assets, this may not be enough. Your auto insurance agent can help you determine how much liability coverage you need.