Auto FAQ - One Nevada Credit Union | Serving Las Vegas, Pahrump and Reno, Nevada - Loans, Checking, Savings, Investments and Insurance

Auto Insurance

Frequently Asked Questions

I have an older car that currently has a very low market value. Do I really need to purchase automobile insurance?

Most states have insurance laws that require drivers to have at least some automobile liability insurance. These laws were enacted to ensure that victims of automobile accidents receive compensation when their losses are caused by the actions of another individual who was negligent.

It’s often the case that the cost of repairing the damages to an older car is greater than its value. In these cases, your insurer will usually just "total" the car and give you a check for the car’s market value less the deductible. Many people with older cars decide not to purchase any physical damage coverage.

What’s the difference between Collision Physical Damage Coverage and Comprehensive Physical Damage Coverage?

Collision Physical Damage Coverage is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage. Comprehensive Physical Damage Coverage provides coverage for most other direct physical damage losses you could incur, including theft. For example, damage to your car from a hailstorm would be covered under your comprehensive coverage.

What factors can affect the cost of my automobile insurance?

A number of factors can affect the cost of your automobile insurance, some of which you can control and some that you can’t.

The type of car you drive, the purpose the car serves, your driving record, and where the car is garaged can all affect how much your automobile insurance will cost.

Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer and less costly accidents than single people do.

What should I do if I’m involved in an accident?

The first priority is the condition of those involved. Call for medical help if anyone at the scene is injured. Notify the police as soon as possible. Obtain the names, addresses, and telephone numbers of all persons involved, including passengers and witnesses, and the license plate numbers of all other cars involved.

It’s best not to admit an accident was your fault, even if you think it was. A simple apology can be construed as an admission of fault. Let the authorities determine who was responsible. Auto accidents can be disorienting even if you are not physically injured. You may not be aware of all factors leading up to the crash, so state only what you know about what happened. Contact your insurance company as soon as possible, even if damages were minor.

What does it mean when a car is “totaled”?

After an accident or theft recovery, if the insurance company decides your car is “totaled,” it means the estimate of repairs exceeds the car’s value. At this point, the insurance company will likely send you a check for your car’s value. It gets to keep your car unless you make arrangements to buy it back “as is”.

What should I do if another driver hits my car?

If you were not at fault in the accident, you will make a third-party claim to the at-fault driver’s insurance company. Because you are the claimant, the insurance company typically will issue the check directly to you. It’s your responsibility to pay the repair shop, and the lender if you have a car loan. If the other driver doesn’t have insurance, your uninsured motorist coverage will take effect.

How do I handle a claim if I cause an accident?

If you own your vehicle and have collision insurance, you will file a first-party claim with your insurance company. It may issue a check either to you, the shop that repairs your vehicle, or to both of you. If you have a lease or a loan, the lending institution may be named on the check. Of course, you will also have to pay your deductible. If other vehicles were involved, the insurance company will settle with the other drivers and you probably won’t be involved.

What happens if my car is stolen?

If your car was stolen, be prepared to wait. Most insurance companies will impose a waiting period to see if the police recover your car. If your car is still missing after the waiting period, usually 21 days, you should receive a settlement soon after. If your car is recovered during the waiting period, the insurance company will want to see a repair estimate before deciding how to proceed. If your policy has a provision for replacement transportation, you may be required to pay for a rental car out of your own pocket and then submit a claim to the insurance company for reimbursement.

What effect does my driving record have on my auto insurance?

A good driving record is critical to your ability to obtain auto insurance. If your past is free of tickets, accidents, and drunk driving arrests, chances are excellent that you will pay much less than the person who has a history of these infractions.

Does the kind of car I drive matter to an insurance company?

Yes! In addition to your age and driving record, the type and value of the car you drive is one of the most important factors in the amount of your premium. Sports cars, for example, can cost significantly more to insure because they may be a favorite among thieves, because statistically people tend to drive them faster, and because they may have a higher replacement cost than a sedan or a van.

Why would I want to buy more insurance than state law requires?

If you are found to be liable for an amount greater than the coverage limits of your policy, you must pay the difference. If you don’t have enough cash, the injured party can go after your home, financial assets, and even future earnings. It’s wise to consider increasing your liability limits when you own a house or other valuable assets.

Why does a high deductible cause my premium to go down?

Generally, the more risk you assume, the less risk you assign to the insurance company, which charges according to how much risk it is insuring against. A deductible is the initial dollar amount of a loss that you must assume before the insurance company will pay your claim. Auto insurance deductibles typically range from $250 to $1,000.

Why does my insurance company want to know my age?

Statistically, the risk of an automobile accident fluctuates with age. Teenagers are among the most expensive drivers to insure because their inexperience makes them more likely to be in an accident than drivers over age 25.

Just as a teenager will have to pay more for being young and inexperienced, drivers can expect to pay less as they reach the age range where they are statistically the safest on the road, roughly from ages 40 to 55. In some cases, rates may go up as a driver becomes elderly.

Can I insure my boat?

Yes. Recreational boat insurance is similar to automobile insurance. You can purchase liability coverage and physical damage coverage. Some policies also offer medical payments, uninsured boater coverage, and legal defense coverage. If you borrowed money to buy the boat, your lender will probably require you to carry insurance.

I am retired, but I work part-time as a handyman. Do I need special insurance coverage for my truck, which I use when I’m hired to make repairs?

Generally, a personal auto policy may be all you need unless you are driving other people around frequently. In some cases, an independent contractor such as a carpenter or landscaper may need a commercial policy – if the vehicle is used more than 50 percent of the time for business purposes. And personal auto policies must have increased limits to cover any equipment that is permanently attached to the vehicle, such as an expensive generator.

I have towing and labor coverage on my auto policy. Does it only come into effect after an accident?

Towing and labor coverage provides emergency road service and pays for towing charges. This coverage is not limited just to accidents, but can be used any time your car breaks down. Labor such as a tire change or battery jump-start performed at the site of a disabled vehicle will be covered, but not the later repair work performed in a service station.

What is the difference between the cancellation and non-renewal of an auto policy?

A non-renewal means only that your company does not want to offer you a policy any longer — possibly because of your driving or claims record over the last three to five years. More than likely, you will find other insurers that are willing to provide insurance at a higher price.

Auto insurers may cancel your policy at any time if you fail to pay your premium, lose your driving privileges, or have not accurately reported the facts relating to your level of risk. A cancellation will make it hard to get insurance for a long time to come.

My state requires minimum insurance coverage of 15/30/5. What does that mean?

Minimum liability limits of 15/30/5 refers to $15,000 bodily injury liability per person, $30,000 per accident, and $5,000 for property damage. Insurance requirements vary from state to state.

I have heard of states with no-fault laws and PIP coverage. How does that differ from states with standard coverage?

There are some states with various forms of no-fault insurance. Generally, no-fault laws require each person involved in an auto accident to pay his or her own medical expenses and lost wages — and stricter versions disallow certain pain-and-suffering lawsuits. Therefore, many no-fault states require drivers to have Personal Injury Protection (PIP), which pays extensive medical expenses, lost wages, and a small death benefit for the driver and all passengers. PIP usually comes with a 20 percent deductible. In some states, both no-fault and PIP coverage are optional.

I plan on driving through several states during my next vacation. I carry the minimum coverage allowed by my state, but will my insurance cover me if I have an accident in another state while I am away?

Clearly, the laws concerning insurance coverage can vary greatly from state to state. It might be comforting to know that if you have the minimum auto liability coverage for your home state, but are involved in an accident in another state, your policy will generally adjust to meet that state’s minimum legal requirements.

Can a driver be found partially to blame for an automobile accident?

In some states, comparative negligence laws make it possible for more than one driver to share responsibility. If a red car is driving too fast and rear-ends a blue car, but the blue car did not have functioning taillights, then the red car may be found 70 percent responsible and the blue car 30 percent. A driver may only collect damages for the percentage of the accident that was not his or her fault, so the driver of the blue car could recover only 70 percent of the damages.

What types of coverage are generally included in a standard personal auto policy?

Bodily Injury Liability — Pays for medical expenses, legal expenses, and judgments against you when you or your car is involved in an accident that causes the injury or death of another person.

Property Damage Liability — Pays for damages to the property of others, caused by you or your vehicle.

Uninsured/Underinsured Motorist (UM/UIM) — Covers the costs associated with damage or injury caused by an uninsured, underinsured, or hit-and-run driver.

Medical Payments — Covers the medical bills of you and your passengers after an auto accident, regardless of who is at fault.

Collision — Covers the damage to your vehicle resulting from a collision, regardless of who is responsible. Collision coverage requires the payment of a deductible by the insured.

Comprehensive Physical Damage — Pays for damage to your car that is not the result of an auto accident, such as theft, vandalism, fire, hail, natural disasters, hitting a deer, etc. Comprehensive coverage also requires a deductible, and will only pay as much as the car was worth before sustaining the damage.

Products are not NCUA/NCUSIF insured and are not guaranteed or obligations of One Nevada Credit Union. Property, casualty and life insurance offered through One Nevada Insurance Services, LLC.
IMPORTANT DISCLOSURE: To offer you an accurate quote, we may need to collect information from consumer reporting agencies, such as driving record, claims and credit history reports. Future reports may be used to update or renew your insurance.

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