Liability vs. Full-Coverage for Car Accidents: Which is Better?

You must have auto liability insurance to put a car on the road in Nevada, but full coverage insurance is not required. What is the difference between liability and full coverage?

Insurance agent fills out paperwork after accident.Insurance agent fills out paperwork after accident.

Liability insurance is required to provide compensation if the policyholder causes an accident and hurts someone else. The at-fault driver is financially liable for the car accident and injuries to others. Liability insurance should provide coverage up to the limits of the policy.

If you have a loan on your vehicle, your lender may require you to have full insurance coverage on the vehicle. This includes collision and comprehensive coverage, which provide financial protection if the car is totaled in an accident or lost or damaged in another way. Full coverage protection keeps the car owner from having to pay off a car loan for a vehicle that is no longer drivable while also trying to afford a replacement vehicle. Lenders typically require full coverage during the period of the loan.

The more insurance coverage you have access to after a car accident, the more money you may be able to recover. But most people only pay for the minimum car insurance that they are required to have. Is that the best approach? What’s the right amount of car insurance if you are driving in Las Vegas on a regular basis — full coverage or just liability insurance? Let’s take a closer look.

What Is Auto Liability Coverage?

A liability is a legally enforceable claim on the assets of an individual or a business. If you cause a car accident, you have created a liability. You are liable for the vehicle damage and harm you have caused. Auto liability insurance protects you from liabilities you may create by causing a crash.

Auto liability insurance typically includes:

  • Bodily injury coverage – It pays for medical bills and lost wages for people (other than the policyholder) who were injured in an accident, including other drivers in multi-vehicle accidents, passengers in either car, pedestrians, or cyclists.
  • Property damage coverage – It pays to repair or replace other people’s vehicles if they were damaged or totaled. Property coverage also pays for the repair or replacement of other property that was damaged in an accident, such as bicycles, fences, mailboxes, or valuable personal property damaged or destroyed in a wrecked vehicle.

A liability policy is usually expressed as a series of three numbers. A 25/50/20 policy is the required minimum auto liability coverage in Nevada for passenger vehicles. It pays up to $25,000 per person for bodily injury per accident, up to a total $50,000 for bodily injury (for all persons) per accident, and up to $20,000 for property damage per accident.

As a car owner, you can buy policies that provide more insurance coverage than the minimum liability coverage the state requires.

When someone files an injury claim after a car accident, they are initially seeking compensation from the at-fault driver’s auto liability insurance. If the insurance carrier denies the claim or fails to cover the full costs of an accident, the injured person may pursue a personal injury lawsuit against the at-fault driver and their insurance carrier.

Bodily injury coverage pays up to the limits as stated in the insurance policy. The Becker’s Hospital Review daily cost survey puts the cost of an inpatient day at a hospital in Nevada at more than $2,400 on average as of 2019. If you caused an accident that put two people in the hospital for 10 days each, you could easily exhaust your minimally required 25/50/20 Nevada liability insurance policy.

What Is Full-coverage Auto Insurance?

Full coverage auto insurance implies that anything that could happen to your car is covered. But in practice, there’s no standard definition of full coverage for car insurance.

Full coverage usually refers to auto liability insurance plus collision and comprehensive coverage.

  • Collision coverage pays the car owner for damage to their car if it collides with another vehicle, an object in the roadway, or a pothole, or it rolls over.
  • Comprehensive auto insurance pays for damage caused by events other than a collision, such as damage caused by weather, by a falling tree, by a fire, or by an animal. Comprehensive coverage also covers theft and vandalism. It typically includes windshield replacement.

The coverage included in a comprehensive policy can vary, so it’s a good idea to carefully review what you’re buying.

A car owner can purchase additional insurance to increase your coverage limits beyond the minimum required by the state. You also may purchase other types of insurance to broaden your coverage.

Additional auto insurance coverage available from most carriers includes:

  • Uninsured and Underinsured Motorist Insurance (UM/UIM): This is bodily injury and property damage coverage the car owner accesses when the person who caused the accident does not have insurance or their insurance does not cover the policyholder’s total losses. Policyholders can access UM/UIM coverage in hit-and-run cases, as well, because there is no liability insurance available if the hit-and-run driver is not identified. Some states require UM/UIM coverage. The Insurance Research Council says that 10.4% of drivers in Nevada in 2019 and 12.6% of motorists across the country were driving without auto insurance.Agent man presentation and consulting car insurance detail to customerAgent man presentation and consulting car insurance detail to customer
  • Medical Payments Coverage: This coverage, sometimes called personal injury protection, or PIP, helps pay post-accident medical bills incurred by the policyholder and their passengers, regardless of fault. It often pays for lost wages due to injuries, as well. About a dozen states, including no-fault insurance claim states (such as Utah), require PIP coverage.
  • Gap Insurance: This is coverage that helps pay off your auto loan if your car is totaled or stolen and you owe more than the car’s depreciated value. Gap insurance, or loan/lease gap coverage, is only available to the original loan or leaseholder on a new vehicle. Gap insurance is meant to be used in conjunction with collision coverage or comprehensive coverage.
  • Emergency Road Service Coverage: This coverage typically pays the costs of towing a car, locksmith assistance if you are locked out of your vehicle, and/or an hour’s worth of labor toward fixing a flat tire or other repair work needed to get the vehicle back on the road.
  • Rental Car Coverage: This is reimbursement for rental expenses if your car is damaged in a covered accident.
  • Aftermarket Equipment Coverage: This insurance, also known as custom parts and equipment coverage, covers permanently installed custom parts or equipment not installed by the original manufacturer that alter the performance or appearance of your vehicle. Most insurance only pays for factory-installed parts or paint. A custom parts and equipment policy should be reviewed closely to ensure it covers your vehicle’s modifications.

Comprehensive and collision insurance policies typically cover what is known as the actual cash value of your car. It will pay out up to the total amount that your car was worth before it was destroyed. In some cases, your car’s cash value may be less than the total cost of auto repairs.

Liability vs. Full Coverage Insurance Costs in Las Vegas

The National Association of Insurance Commissioners (NAIC) estimated average expenditures for private passenger automobile insurance by state from 2014 to 2018 to provide a measure of the relative cost of automobile insurance to consumers in each state.

For Nevada, the NAIC found an average expenditure of $1,260 per year, ranking 9th among the most expensive states in the country.

Average yearly costs included:

  • $900 for liability insurance
  • $366 for collision coverage
  • $119 for comprehensive coverage

The NAIC says 80% of Nevada car owners were insured with comprehensive coverage.

Contact a Las Vegas Car Accident Attorney

If you own a car in Nevada, it’s important to consider the types of insurance protection you need. Car insurance is meant to pay the cost of medical bills, property damage, lost wages, and more when losses are incurred because of a car accident. The problem is that insurance companies that appear friendly on TV don’t act like a friend when you have a claim, especially an expensive one. Insurers will try to protect their profit margins by denying or minimizing an accident claim. They frequently offer settlements that are lower than the fair value of the claim.

At Sam & Ash Injury Law, our Las Vegas car accident attorneys will build a strong case for the full compensation you need after a serious injury. We’ll put you and your needs first and make sure the insurance company doesn’t take advantage of you.

For a free, no-obligation legal consultation with car accident attorneys who want What’s Right for you, contact Sam & Ash Injury Law in Las Vegas. There’s no fee unless we recover money for you. Call us today.