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Module 14

Vehicle Insurance and Registration

In Module #1, we discussed applying for, obtaining and keeping your driver’s license. In this module, we will discuss two important items that will be required for any vehicle you drive on public roadways in Nevada. Those items are:  motor vehicle registration and motor vehicle insurance.

Insurance

While you’ve probably heard the word “insurance” many times, you may not know exactly what it is or what purpose it serves. In this section, you will learn how insurance works, as well as the legal requirements for automobile insurance in the State of Nevada.

If you plan to drive a motor vehicle on the public roadways of Nevada, you are required by law to carry automobile insurance for that vehicle. When you “insure” a vehicle, you are providing what’s known as “financial responsibility.”

You may have heard someone say, “I’m insured,” when talking about their car.  So, you might wonder why we are talking about “insuring a vehicle.”  It’s important that you understand that it is indeed the car, and not the driver, that is insured.  What this means for you is that whenever you get in the driver’s seat of any vehicle, it’s your responsibility to know whether that vehicle is insured, and if so, that the insurance policy covering it will cover you if you are involved in an accident while driving it.

Consider this:  if you own a car and it is fully insured, that doesn’t necessarily mean that you will be covered when a friend loans you his car for a quick errand and you get involved in an accident driving it.  Your policy for your own car may or may not cover you when you drive someone else’s car.  And the friend’s policy on his car may or may not cover any accident caused by someone he allowed to drive his car.

So, as you can see, it’s your responsibility to know the facts about the insurance for any car you drive.

Automobile insurance is designed to cover the financial obligations a vehicle owner may face when involved in a traffic accident that results in injury to a person or damage to property (cars, light poles, buildings, etc). For example, if you were to cause an accident that resulted in injury to another driver and/or damage to their vehicle, your insurance would cover the costs to repair the other driver’s vehicle as well as their associated medical costs.

In other words, you would not be financially responsible for paying for the damage you caused. Instead, your insurance company would pay for those damages for you. This is because you have paid them (via an insurance policy, which is a legal contract) to cover the financial risks involved with automobile accidents.

Nevada Liability Insurance Basics Video

Understand, however, that the amount of money that your insurance will pay to cover these costs is dependent on the type and amount of insurance that you have paid for. For example, if you cause $20,000 in property damage but you purchased only $10,000 in property damage insurance, you would be personally liable to pay the additional $10,000.

Insurance Policies

An “insurance policy” is a contract between you and the insurance company where they promise to pay for any losses (damages) you cause, depending on what is covered in the policy you purchase. When you pay for insurance, that payment is called a “premium.” The way insurance works is that you pay a premium (substantially less than the amount that the insurance company covers you for), either in a lump sum or monthly payments, and your insurance covers your financial risk during the time that the policy covers.

Although your insurance policy is a contract that is guaranteed for a specific period of time, understand that your insurance company will cancel your policy if you fail to keep your end of the contract. This usually happens when you fail to make payment or engage in prohibited behavior like DUI or drug use.

Each insurance policy is different, and the premium you pay is based on several factors including the type of car you drive, your age, gender, marital status, where you live, your driving record, the amounts and type of coverage you carry and several other factors.

There are 47 states that require you to carry insurance on the vehicles you operate on public roadways. Each state differs in the minimum amount of insurance that you must carry. Some Nevada drivers carry only the required minimum amount of insurance while others opt to carry higher limits and more comprehensive coverage that not only protects other drivers, but protects them as well.

Nevada Insurance Requirements

Before purchasing an automobile insurance policy, you should know and understand the minimum coverage required. In Nevada, drivers are required to carry minimum coverage of $15,000 for bodily injury or death to one person in any one accident and $30,000 for bodily injury or death of two or more persons in any one accident—plus $10,000 for injury to or destruction of property of others in any one accident. This minimum coverage amount is commonly referred to as: 15/30/10.

The coverage described above is better known as “Liability” coverage. This type of coverage covers ONLY the damage you cause to others (what you are “liable” for); it does NOT cover the costs to repair your vehicle or your associated bodily injuries. For example, if you were to crash your vehicle into a light pole, liability insurance would only pay for the damage caused to the light pole. It would not cover the costs to repair the damage to your vehicle as a result of that accident.  This example should help you see why it is important for you to learn the various types of automobile coverage that insurance companies offer.

Liability Insurance: as we just discussed, liability insurance covers only the damage that you are liable for to others. In other words, your liability insurance will cover others when you are at fault.

Collision Insurance: collision coverage covers the costs involved in repairing the damage to your vehicle or paying the cash value for your vehicle if it cannot be repaired.  When the car can’t be repaired, it  is referred to as being “totaled.”

Collision coverage is usually optional; however, if you have a car loan that is financed through a bank, the bank will usually require you to carry collision insurance until the car has been paid off in full. Collision insurance typically involves what is known as a “deductible.” A deductible is the amount that you must pay out of pocket before your insurance company will pay any expenses. For example, if the damage to your vehicle is $5,000 and your deductible is $1,000, you will be required to pay the first $1,000 and your insurance company would pay the rest ($4,000). Generally speaking, the higher the deductible you have, the lower your insurance premium.

Comprehensive Insurance: comprehensive insurance provides coverage for automobiles that are damaged by incidents other than traffic collisions such as theft, vandalism, fire and weather (floods, hurricanes, hail, tornados, etc.). Comprehensive insurance also utilizes deductibles.

Uninsured/Underinsured Coverage: this type of coverage covers you when another party causes damage or injury to you but has no insurance, or not enough insurance to pay for the damage/injuries you have suffered. In some areas of the United States, it is estimated that 1 out of every 3 drivers is uninsured. You might wonder how this is possible, considering that having insurance is required by law.

The answer is that it does indeed happen, and when the uninsured person is involved in an accident, they are in for a rough time and subject to severe penalties.  The court can even order their property, such as their house, to be sold in order to pay your hospital bill for serious injuries or for repairing the damages to your car that the uninsured person may have caused.

All of that, however, does not necessarily mean you can ever get anyone to pay. Often, the reason why the person was uninsured in the first place is that he/she is under-employed or unemployed, so even if the court were to order that person’s wages garnished, it would mean getting very small amounts paid monthly for many years—if the person even remains employed!

This explains why uninsured coverage exists.  And, a word to the wise:  it should also be clear that the answer to anyone who says, “I’d really like to buy auto insurance, but I can’t afford it” is: “If you can’t afford the insurance, you definitely can’t afford to own a car, period.”

Full Coverage Insurance: the term full coverage insurance generally means that in addition to liability insurance, a combination of both comprehensive and collision are also part of the policy. This is a rather generic term that most insurance agents no longer use.  Because of this, it is important that when you purchase full coverage insurance that you make sure your limits and deductibles are appropriate, in addition to the inclusion of other coverage should you desire it.

Besides those listed, there are additional insurance coverage options such as rental coverage (for rental cars), loss of use coverage, medical-payments, towing, GAP and personal property (theft of personal items from inside your vehicle).

Saving Money on Your Insurance

As mentioned, the price you pay for insurance is based on several factors, including your age, gender and type of car you drive. Just like different grocery stores have different prices for the exact same loaf of bread, insurance companies have different prices for the exact same coverage. Because of this, it is smart to shop around and compare prices when seeking insurance.

Planning ahead can save you a lot of money. The fact is, the type of car you buy will have a significant effect on your insurance costs. Insurance companies keep massive amounts of records and reports on the types of claims they pay out every year. An insurance company will consider the following when deciding what your insurance is going to cost you:

  • How likely is it that your car will be stolen – the fact is, there are certain cars that are more desirable to thieves than others.
  • What is the likelihood that your car will be damaged?
  • What kind of damage does your type of vehicle inflict when involved in an accident (think SUV vs compact car).
  • How much will replacement parts cost the insurance company? Obviously, the parts for a $250,000 Ferrari will cost more than a $25,000 Ford Taurus.
  • How badly do people get hurt when driving your type of vehicle? Some vehicles have higher safety ratings than others because of their build quality, design, and other factors. If you have a car with a poor safety rating, you can expect to pay higher insurance premiums.

Many insurance companies offer a variety of discounts for various reasons. These discounts are not always advertised so it is important that you ask before you purchase insurance. For example, some insurance companies will give you a discount for taking a driver education course (like the one you are taking now). They also offer discounts for getting good grades in school, for having added safety features (anti-theft, airbags, automatic seatbelts, blind spot alerts, traction control, etc.), for insuring more than one car with the company, for maintaining a good driving record, and other reasons.

Definitely shop around for your car insurance. Don’t just go with the first agent you speak with. Now, thanks to the Internet, you can shop around right from the comfort of home. Go ahead and get at least three price quotes from different kinds of insurance companies.

If your car is worth less than 10 times the annual insurance premium, purchasing extra coverage may not be cost-effective. That’s one great thing about owning an old car!

If you’re in the market for a new car, call to see how much it will cost to insure in the first place. Having a car alarm and other anti-theft devices can help lower your costs.

Always ask about discounts. Don’t be shy. Companies expect this!

Things to let your insurance company know:
  • What’s my cost if I have a $500 deductible? (Increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by as much as 30 percent.)
  • How about a $1,000 deductible? Going to a $1,000 deductible can save you 40 percent or more. (Now, if you don’t keep at least this much in the bank, don’t choose this option!)
  • My credit rating is excellent.  I always pay my bills on time.
  • What if we insure more than 1 car with your company?
  • I haven’t had an accident in more than three years…
  • I haven’t had a traffic ticket in three years…
  • I’ve taken a driver’s training course.
  • My car has an anti-theft device.
  • I don’t put a lot of mileage on my car in a year’s time.
  • I carpool.
  • My car has air bags.
  • My car is quipped with anti-lock brakes.
  • I have daytime running lights.
  • I’m a student driver with good grades.
  • Since I have both auto and home coverage with you, do I qualify for a discount?
  • I’m a college student away from home…
  • I’ve been a long time customer…
  • My mom and dad use your company…
  • Do you offer any other discounts? Some companies offer reduced rates to drivers who get insurance through a group plan from their employers and other professional groups. It can’t hurt to ask.

Not every company will offer the same discounts. Compare the final prices the various companies offer you. It pays to shop around for your car insurance!

Specific Rules for Nevada Insurance

Nevada requires that your automobile insurance be provided only by insurance companies authorized to do business in the State of Nevada. When you register your vehicle in Nevada, you must present proof to the DMV that you possess valid insurance for that vehicle. (We’ll be discussing the automobile registration process later on in this module,)

Further, Nevada law requires that proof of insurance be carried in your vehicle at all times. By law, you are required to present proof of vehicle insurance when requested to do so by law enforcement. You are also required to provide your insurance information to any driver that you are involved in a traffic collision with.

Important:  If there is a change in your insurance company or policy number, you must report it immediately to DMV to avoid your registration being suspended. If you cancel you insurance with one company, that company will report your lack of insurance coverage to the DMV. If DMV does not see at that point that you have new insurance on file, they will suspend your vehicle registration.

This is also the case for missed insurance payments. If you fail to make a payment to your insurance company, they will cancel your policy and report the cancellation to the DMV. Nevada has no grace period. A one-day lapse in your insurance coverage will result in a suspension of your registration. The minimum penalty is a $250 reinstatement fee!

Remember, any insurance changes must be reported to DMV as soon as possible. This can be done online. If you have changes to your coverage, you or your agent need to report:
  • The insurance company’s name (enter exactly as it is on the card),
  • The policy number (enter exactly as it is on the card),
  • The effective date and the termination or expiration date.
The following are tips regarding insurance, provided by the Nevada DMV:
  • There is no need to visit a DMV office for most insurance issues. Use the Internet, telephone or mail.
  • Update your policy information with the DMV any time you change coverage or companies.
  • Your insurance must be written for Nevada and at least one of the named insured must appear on the vehicle registration. Minimum coverage is 15/30/10.
  • If you drop the liability insurance on any vehicle for any reason, you must cancel the registration and surrender the license plates. Vehicles must be continually insured to be driven on public streets.
  • If you are new to Nevada, you must notify your insurance company that you have moved here. Your policy must be written for Nevada. Out-of-state insurance is not accepted.
  • You can verify whether your agent, agency or company is properly licensed at the Nevada Division of Insurance website.

Not having proof that you possess the minimum liability insurance coverage required by the State of Nevada can result in steep fines and suspension of you vehicle’s registration.

Notification of Suspended Car Insurance

The Nevada DMV uses an electronic reporting system called Nevada LIVE to check the status of your car insurance throughout the year. Insurance companies that are licensed to do business in the State of Nevada are required by the DMV to validate the status of insurance coverage. If the DMV LIVE system is unable to verify that your insurance coverage is current, the DMV will send you notification in the mail. Failing to respond to the DMV mailing within 15-days will result in the suspension of your vehicle’s registration.

Nevada requires that you continuously carry motor vehicle liability insurance coverage on all vehicles that are actively registered (being operated on public roadways—not in storage). Nevada has no grace period for this law! As soon as you have a lapse in insurance coverage, you are subject to fines, fees and penalties.

If you allow your vehicle liability insurance to lapse, you will be required to pay reinstatement fees (in addition to applicable fines). These reinstatement fees can be very costly as they range from $250 to $750. Fines range from $250 to over $1,000. These are based on the length of time that you let your insurance lapse as well as prior history of letting the insurance lapse. If you allow your insurance to lapse two times, requiring a 3rd reinstatement, your driver’s license will be suspended for a minimum of 30-days and a total of $1,750 in fines and fees!

Driving without insurance is just not worth it! If you were to cause an accident, the courts can force you to pay for the damage you caused. If you do not have the money to pay for those damages, your wages can be garnished until the damages are settled. Imagine spending 40-hours per week at a job, only to have 50-75% of your paycheck taken away to cover the damages your caused. Further, you will be subject to high fines and fees as well as the possibility of losing your driver’s license.

Registration

Vehicle registration is seen as a pain by some motor vehicle owners, but it is really set up for their own protection and rights.  The purpose of vehicle registration is to establish clear ownership and to tax motorists or vehicle owners.  The basic Registration Fee funds state road construction and the DMV operating budget.

Although you may gripe about having to pay the registration fee for your car every year, you will be glad your car is registered if, for example, one day you find out that someone apparently decided they needed your car more than you do, and they stole it.  No, you won’t be happy about that, but what you’ll be glad about is that if and when your car is recovered (and many stolen vehicles are), you will be able to prove you are the registered owner.  And perhaps you will be glad to know that your registration and the other fees that go along with it are being used to pay for paving and maintaining our roads and supporting the DMV’s operations.

The State of Nevada requires all Nevada residents and certain non-residents to have their vehicle registered in Nevada. Failing to abide by the law regarding vehicle registration can result in fines in excess of $1,000.

New car purchases must also be registered in Nevada within 30-days of the date of purchase.

Nevada Registration Exemptions

The State of Nevada allows for certain exemptions regarding vehicle registration. If any of the following apply to you, you do not have to register your vehicle in Nevada:
  • You are on active duty in the military service of the United States
  • You are an out-of-state student
  • You are a registered student at a college or university located outside Nevada and in the state for a period of not more than 6 months to participate in a work-study program for which you earn academic credits from the college or university
  • You are a migrant or seasonal farm worker
  • You are a border state employee (commute into Nevada for employment within 35 miles of the border)

If your vehicle is in storage or not being driven on Nevada public roadways, you are not required to maintain insurance or registration on that vehicle. You must, however, surrender that vehicle’s license plates to the DMV if you cancel your liability insurance. Keep in mind that vehicles parked on public streets without valid registration are subject to being towed.

Vehicles Requiring Registration
  • Cars
  • Trucks
  • Motorcycles
  • RVs
  • Trailers
  • Low Speed Vehicles: allowed only where speed limit is 35 mph or less
 Vehicles that do not require registration
  • Mopeds/Scooters: mopeds do not require insurance or vehicle registration. Per the Nevada DMV: If the moped produces more than 2 gross brake horsepower, or has a displacement of more than 50 cubic centimeters (50 cc), or produces not more than 1500 watts final output, or is capable of exceeding thirty miles per hour (30 mph) on a flat grade, it is considered a motorcycle and must be registered as such. A class C or M license is required to operate a moped on a public roadway.
  • Motorized Bicycle: registration is not required by a class C or higher driver license is.
  • Golf Carts: do require a DMV permit and can only be operated in designated golf cart areas

License Plate Display

When you register your vehicle, the DMV will provide you with one or more license plates depending on the type of vehicle you operate. Nevada law requires most vehicles to display both front and rear license plates but only rear license plates for motorcycles and trailers. If your vehicle is not designed to hold a front license plate or if the manufacturer does not offer an add-on bracket or frame, only a rear license plate is required.

By law, your license plate must be securely fastened to your vehicle to prevent it from swinging. Also, the bottom of the license plate must be no less than 12-inches from the ground. The license plate must be clearly visible (from 100 feet distance in daylight and 110 feet at night when illuminated by headlights).

Any excess dirt, debris, etc. must be removed so that the license plate can be seen. Also, you should avoid any frames or license plate covers that cause the plate to not be easily read. The rear license plate must display the registration decal that shows the month and year of registration expiration.

License Plate Possession

Unlike some states, in Nevada when you sell your vehicle, you are required to keep your license plates. They do not stay with the vehicle! If you no longer have use for your license plates, they must be surrendered to the DMV.

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