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When Small Print Means Big Consequences

With the evolution of e-commerce, we find ourselves managing more and more our transactions online or with apps, i.e. online banking, utilities, cell phone accounts etc.

One such transaction is our vehicle insurance policies. Insurance companies have made the process quite simple. Sign up, enter in your information or download the app, click some boxes, and then submit.

When choosing your insurance coverage options, price is likely the guiding factor. Most of the time, we select and unselect the options until we see the magic number – the lowest amount per month possible.

Unfortunately, many policy holders don't understand what they are selecting, what is included or excluded, and what it all means when they are involved in an accident.

Although it is state law for vehicle owners to carry minimum levels of insurance, there are many who choose not to carry any insurance, or they default on their policy payments and lose coverage. In Nevada, beginning in July 2018, auto insurance policy holders will be required to carry coverage of at least $25,000 per person, $50,000 per accident, and $20,000 in property damage also referred to as 25/50/20 limits.

This means that if you or anyone driving your vehicle are in an accident that is considered your fault, you have $25,000 per person and $50,000 per accident in coverage for the other vehicle occupants' bodily injuries, and $20,000 in coverage for their property damage.

If you are not the at-fault driver, you are at the mercy of the other vehicle's policy coverage - if they have any at all.

Is this enough? Probably not. If you are injured and the at-fault vehicle and/or driver has the minimum insurance coverage, just the cost of the emergency room and ambulance could surpass the $25,000 limit. What if you need to see a specialist, require surgery, require months of physical therapy, incur lost wages, etc.? Likely, you won't have enough coverage for all these damages.

The Answer to protect yourself and your family is Uninsured/Underinsured Motorist coverage. This is coverage that protects you when the at-fault driver either (1) has not insurance, or (2) does not have enough insurance to cover all the bodily injury damages. Your insurance company is required by law to offer you uninsured motorist coverage and underinsured motorist coverage.

An added benefit of Uninsured/Underinsured Motorist coverage is that it applies to you, anyone in the car with you, and any family members living in the household who are injured in an accident. And you don't even have to be in a car for this coverage to apply – it also covers you and any family members if injured in an accident as a pedestrian, which includes activities like riding a bicycle. Lastly, this insurance follows you to any vehicle you and your family occupy, including rental car or the cars of friends, families, and co-workers.

If you recently purchased your car or are leasing your vehicle, the $20,000 minimum in property damage coverage might not cover your property damage and you could be stuck with the difference and without the resources to get another vehicle.

For your property damage, one type of additional coverage is called GAP insurance - an optional insurance coverage that can be added to your collision insurance policy. It pays the difference between the balance of the lease or loan due on a vehicle and what your insurance company pays if the car is considered a total loss. It is inexpensive and could save you thousands.

The other option is comprehensive collision and rental insurance, which covers the cost of repairing or replacing your vehicle and providing you with a rental car. This allows you to not be stuck at the mercy of the other driver's insurance, their investigation and gets you back on the road immediately.

For those who are nervous about notifying their insurance company about an accident, please know that insurance companies cannot raise your rates for accessing your Uninsured/Underinsured coverage, GAP coverage, or collision coverage if you are not the at-fault driver.

You can't control what someone else does, how they drive, or their decision to follow the law and carry motor vehicle insurance. However, you can control how you protect yourself. Don't spend your hard-earned dollars to protect others when you can pay a minimal amount more and protect yourself and your family. Contact your insurance company today and ensure you have, at a minimum, Uninsured/Underinsured Motorist coverage.