The auto insurance market throughout the United States is in a state of flux. Both personal and commercial insurance carriers are raising their premiums to compensate for increasing losses, many of which seem to be side effects of economic growth. For example, many companies facing labor shortages must lean on an inexperienced subset of the workforce, one that tends to have a higher proportional rate of accidents (especially in industries that require commercial vehicles). The scourge of distracted driving, which claims over 3,000 lives per year, is yet another driving force for higher insurance costs.
Selecting a personal auto insurance policy often means striking a balance between securing adequate coverage and working within reasonable budget constraints. For drivers in Nevada, what are some key factors to consider when choosing the right plan and provider? The following information will answer this and other questions that involve the auto liability market, especially as it pertains to the Silver State.
Average Rates and Minimum Coverage in Nevada
Nevada is an at-fault insurance state, which means that in the event of a collision, the driver at fault (or more frequently, his insurance carrier) must pay for any damages incurred. Of course, the corollary of that is that your insurance company will not pay for the resulting damage, which may place you in a precarious situation if the at-fault driver is uninsured or underinsured.
As with all of the other states, Nevada law stipulates that each driver must, at the very least, be covered by minimum liability insurance. The minimum coverage limits in Nevada follow the “25/50/20” rule:
- $25,000 of liability insurance for bodily injury per person
- $50,000 for bodily injury per accident
- $20,000 for property damage
Of course, Nevada residents have the option to purchase additional insurance for themselves and their families. Overall, the average car insurance rate for Nevada drivers is 26.2% higher than the rest of the United States, making it one of the more expensive states for personal auto insurance.
3 Factors to Consider When Selecting an Auto Insurance Policy
Since Nevada is one of the pricier areas for car insurance, it makes sense to carefully weigh out all the relevant factors before choosing a personal policy. Here are 3 key factors that may prove helpful to you in the decision making process:
1. Do I Want a High Deductible or a High Premium?
The deductible of an auto insurance policy is basically the amount you would pay out of pocket in the event of an accident. For example, if you are in an accident that causes $3,000 worth of damage, and have a deductible of $1,500, then you would have to pay the first $1,500 on your repair bill before your insurance plan kicked in.
A high deductible can definitely create a financial strain in the event of an accident, especially if the total amount of damage incurred is not too much higher than the out-of-pocket amount you have to pay. However, there is a silver lining that comes with a high deductible: typically the insurance policy with a high deductible would also have a low premium. In fact, in the majority of cases this principle holds true: the higher your deductible, the lower your premium (and vice versa).
Thus, you should ask yourself questions such as:
- Would it be more advantageous for me to pay a high premium for a plan with a low deductible, or to go with the less expensive plan that won’t provide as much coverage in the event of an accident?
- If I get in an accident, does the make and model of my car lend itself to more or less costly repairs?
- Do I regularly drive in areas where a high number of accidents occur?
The answers to these and similar questions may provide some guidance as to which type of plan you should choose.
2. What Level of Coverage Do I Want?
There are many add-on options for personal auto insurance in Nevada. Some of the options include:
- Collision insurance. Collision coverage ensures that any damage caused by an accident is paid for, regardless of who was at fault.
- Comprehensive insurance. A comprehensive insurance policy protects your vehicle against a range of non-collision damages, including theft, vandalism, falling objects, or fire.
- Uninsured motorist insurance. This plan pays for the medical expenses associated with an accident if the driver who hit you was uninsured or underinsured (e.g., did not have adequate coverage).
- MedPay. Medical payments coverage will cover the cost of injuries sustained by you and your passengers, regardless of fault, up to the selected amount. These costs can include for example health insurance deductibles and ambulance costs.
Everyone must decide for themselves what level of coverage they feel comfortable with. For instance, since over 10% of Nevada drivers are uninsured, many policyholders decide to carry uninsured motorist insurance as an extra protection in the event of an accident.
3. What Other Factors Will Affect the Cost of Coverage?
In Nevada, as in other states, there are a wide range of personal and economic factors that will affect how much you pay for a personal auto insurance policy. Such factors may include:
- The strength and competitiveness of the local auto liability market
- Your gender and age (male teenagers are usually on the hook for the highest premiums)
- Your driving record
- The make and model of your vehicle
- Your credit record
While there may not be much you can do to change the above-mentioned factors, understanding how they affect the cost of a personal auto insurance policy can help you to anticipate pricing, and shop around for the best deal.
Of course, besides the 3 key factors mentioned above, there is another major component of selecting a top-notch auto insurance policy: choosing the right provider. While you could jump at the first discounted plan you find, it is usually wiser to consult with an independent professional that can truly understand your personal needs, and craft a policy package that is precisely tailored to your circumstances. That way, you can have the coverage you want, at the price you can afford.
Harris Insurance can be that ideal insurance partner for you. Whether it’s commercial or personal insurance, our team of experts is here to assist you to find the best plan for all of your insurance needs. Reach out to us today to learn more.