The Nevada Division of Insurance recently held a live webinar to provide the public with an opportunity to discuss the rising cost of auto insurance in the state.
The event on the subject was held on November 1 and ran from 10:00 am through until 11:30 am.
The webinar was meant to address the rapidly rising auto insurance rates in the state, which have been climbing as has been the case across the country. According to data from the US Bureau of Labor Statistics, premiums rose by an average of 18.9 percent nationwide. There are a number of reasons for this, including a rise in vehicle crashes since 2019 before the pandemic, as well as a higher cost for repairs and parts. Worsening this trend has been a rising instance of natural disasters, particularly in the form of storms, hail, flooding and wildfires, which are more frequent and severe.
More specific to Nevada, the state’s tax on premiums. This tax is the fourth largest source of general fund revenue for the state. Nevada applies the second-highest tax on premiums in the country. Premiums are taxed at 3.5 percent, behind the state in third place, Hawaii, which taxes 4.265 percent, according to statistics from the National Association of Insurance Commissioners.
The auto insurance webinar featured panelists who are experts in the industry.
Among the webinar’s panelists included speakers from the Nevada Department of Motor Vehicle, the American Property Casualty Insurance Association, and Nevada Independent Insurance Agents.
Participation in the event was open to the public, which was provided with an online link through which they could register for free.
Premiums in the state are expected to continue climbing and to stay high for at least another couple of years. Experts have cautioned drivers that there may not be relief at least until 2025. At the event, experts showed that the last ten years have brought increases in premiums higher than 50 percent on average.
A number of panelists said that the auto insurance rates rose this sharply due to “a perfect storm”.
“Accident frequency and severity have increased as motorists return to normal driving patterns post-pandemic. Unsafe driving practices we witnessed during the lockdowns have remained and more likely to cause accidents in denser traffic conditions. Las Vegas and Reno continue to add drivers,” said Chief Deputy Commissioner for the Nevada Division of Insurance Todd Rich.
“Additionally, the cost of new cars continues to rise. The average car payment is now $750 a month. The cost of repairing newer vehicles has continue to rise. Another factor is the increased cost of medical care. Auto insurance fraud remains a notable problem. The ongoing effects of the pandemic on supply chains have led to shortages of parts and disruptions in the labor market. The cost of litigation is also a significant driver of costs.”
