Auto Insurance FAQs

The Division held a public forum on auto insurance rates in Nevada on November 1, 2023. A recording of the webinar may be viewed here.

Below are some of the questions that were raised in response to this forum. Note that some of these answers have been provided by our panel experts when appropriate.  

•  In general – what factors are causing the auto insurance rate increases?  
• How long does it take to get a rate filling reviewed and approved?
•  What would happen if the NV Division of Insurance stopped approving rate increases?  
•  One speaker said the NV Division of Insurance had paused the use of credit scores during the pandemic but that was/is about to end. Do we know when? Do we know if other states have done the same?  
• Can you tell me where Nevada rates compared to other states. Is it the costliest state for auto insurance? Or among the highest?  
• Combined Ratios for the industry have been showing over 100 for a few years in a row. What is the breakdown of loss ratios/expense ratios?  
• Consumer Federation of America is fighting against credit usage for rates - don’t the statistics show that credit is one of the most indicative of future losses?  
•  Considering the high number of accidents that are caused by muscle cars, such as Dodge Challengers, Chevy Camaro, (some) Ford Mustangs, etc., why aren’t those rates dramatically increased to make them less desirable and to cover the costs they create for the general public?
• When fraudulent claims are made, usually through attorneys, why aren’t those attorneys disciplined and why aren’t those fraudsters investigated and charged? As it currently stands, when an obviously fraudulent claim is made against an insured individual, their insurance company often just pays the claim or negotiates it to a lower amount and then the case is dropped. Why not go after these people?  
• How does the consumer determine if their complex vehicle is fully covered/fixed in the event of claim    
• Would preventing vehicles (with expired plates and non-insurance) on the road reduce insurance premiums? Is the rule follower with insurance paying for those who choose not to carry insurance?  
•  How do we get legislation passed to stop people from running red lights? I think the penalty should be BIG and enforcement should happen.  
• Where can I get more information on auto insurance?  

In general – what factors are causing the auto insurance rates to increase? 

Many factors have been contributing to the rise in auto insurance rates including:

• More traffic coupled with bad driving habits leading to increased frequency and severity of accidents
• Rising costs of new and used vehicles
• Parts and labor shortages
• Supply chain issues
• Inflation
• Insurance fraud
• Rise in medical costs
• Litigation and increases to personal injury judgments

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How long does it take to get a rate filling reviewed and approved? 

Every rate filing is different, and timeframes of review vary highly based on the contents of the filing. If a rate filing is straightforward and does not contain any treatments that are adverse to consumers, review and approval may happen within a few days of submission. If a rate filing is complex, has missing or inconsistent documentation, or proposes significant rate increases overall or to any segment of consumers, the Division will thoroughly review the filing, formulate any requests or objections, and submit them to the insurer. The insurer then has 30 days to respond to the Division’s requests. For many complex rate filings, there can be multiple objection and response cycles until all issues are resolved.

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What would happen if the NV Division of Insurance stopped approving rate increases?

Nevada is a prior-approval state for personal automobile insurance rates, which means that insurers are only able to implement rates that the Division of Insurance has approved. It is the duty of the Division to ensure auto rates are adequate, not excessive, and not unfairly discriminatory. However, if insurers experience significant losses by charging rates they consider inadequate, some insurers may choose to tighten their eligibility guidelines, limit writings of new policies, non-renew existing business, or even leave the market altogether. Therefore, the Nevada Division of Insurance needs to consider insurers’ requests for rate increases objectively and focus both on consumer impacts and insurers’ ability to set premiums at levels that reflect their costs. If the Division does not approve appropriate rate increase requests, carriers could become unprofitable which could lead to insolvency. The more likely scenario is that carriers will cease to write policies in Nevada making the environment less competitive. Less competition could lead to higher rates.

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One speaker said the NV Division of Insurance had paused the use of credit scores during the pandemic but that was/is about to end. Do we know when? Do we know if other states have done the same?

Guidance on Regulation R087-20, as currently published on our website, may be found here.

The guidance states that the effective period of Regulation R087-20 is until May 20, 2024. After that date, insurers who choose to do so would be able to resume using credit-based insurance scores to increase consumers' premiums at renewal, subject to the applicable requirements of Nevada law (in particular, NRS 686A.600-730).

We would not be able to comment on what other states are doing and suggest contacting them directly.

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Can you tell me where Nevada rates compared to other states. Is it the costliest state for auto insurance? Or among the highest?

Dale Porfilio (Insurance Information Institute): The Insurance Research Council prepared a study comparing the affordability of personal auto insurance by state. Nevada ranked eighth for least affordable as of year-end 2018.

Gennady Stolyarov (NV DOI): The National Association of Insurance Commissioners (NAIC) published its 2021 Auto Insurance Premium Supplement, where, on page 22, the Combined Average Premium for each state is listed for the years 2017 through 2021. In 2021, Nevada was shown as having a Combined Average Premium of $1,381.43, compared to the nationwide average (mean) of $1,189.42.

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Combined Ratios for the industry have been over 100 for a few years in a row. What is the breakdown of loss ratios/expense ratios?

Dale Porfilio (Insurance Information Institute): The industry’s countrywide net combined ratio for personal auto in 2022 was 112.2. This is comprised of 79.8 for losses, 10.3 for loss adjustment expenses, and 22.1 for operating expenses.

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Consumer Federation of America is fighting against credit usage for rates - don’t the statistics show that credit is one of the most indicative of future losses?

Michael DeLong (Consumer Federation of America): The insurance industry claims that people with lower credit scores should pay higher premiums. But we know that the use of credit history is filled with errors and problems that leave low-income drivers and people of color with lower scores and higher auto insurance premiums, even when they have a perfect driving record. Most importantly, if you are a perfectly safe driver but financially vulnerable and can't quickly improve your credit score, you are stuck with unaffordable auto insurance. 

Gennady Stolyarov (NV DOI): The Nevada Division of Insurance makes available its Credit Scoring FAQs on its website, which provides information about how credit-based insurance scores may and may not be used in Nevada, as well as what consumers may do if they have concerns about their credit-based insurance scores or how those scores are used in rating their insurance policies.

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Considering the high number of accidents that are caused by muscle cars, such as Dodge Challengers, Chevy Camaro, (some) Ford Mustangs, etc., why aren’t those rates dramatically increased to make them less desirable and to cover the costs they create for the general public?

Mike Nelson (QuantivRisk): The best place to get that data is from HLDI, Verisk/ISO.

Dale Porfilio (Insurance Information Institute): I agree with Mike Nelson that HLDI and/or Verisk have research about the relative insurance risk by auto make and model. I would add that most insurance companies have rating factors to reflect the relative risk by auto make and model, resulting in luxury and high-performance vehicles generally paying more than other vehicle types.

Aaron Schulenberg (Society of Collision Repair Specialists): I’m personally unaware of those vehicles costing more to fix. I do not believe there are many unique characteristics within that would make them different.

Ryan Mandell (Mitchell's Auto Physical Damage business unit): We do not have any data that suggest “muscle cars” cause a higher number of accidents. Every piece of research I have read shows accident causality is primarily related to the driver and driver behaviors as opposed to the characteristics of the vehicle. Below is just a quick data pull showing the average severity for model year 2018 and newer for the Accord, Altima, Camaro, Camry, Challenger, and Mustang. This is based on data from calendar years 2020-2023 YTD. And while yes, the average severity for the “muscle cars” is higher, so is the average Actual Cash Value (ACV) of those vehicles meaning you have more room until you reach the Total Loss (TL) threshold. These numbers alone, however, do not indicate more sever accidents just costlier repairs which may be related to a variety of factors (as you know). Also, I was under the impression that many insurers DID rate “muscle cars” differently than other passenger vehicles and charge higher premiums.

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When fraudulent claims are made, usually through attorneys, why aren’t those attorneys disciplined and why aren’t those fraudsters investigated and charged? As it currently stands, when an obviously fraudulent claim is made against an insured individual, their insurance company often just pays the claim or negotiates it to a lower amount and then the case is dropped. Why not go after these people? 

(Coalition Against Insurance Fraud): Insurance companies are mandated by law to report suspected insurance fraud to state departments of insurance, and in many states, regardless of whether a claim has or has not been paid. In many cases, fraudulent claims, and the parties associated with those claims, are in fact investigated. Due to confidentiality statutes however, state DOIs are often precluded from confirming the existence of an investigation. In order to present a case for prosecution, state fraud bureaus are required to meet a specific threshold in terms of evidence. Unfortunately, in many situations investigated, the criminal burden of proof cannot be met. With that being said, if a state DOI's confidentiality statute permits them to share confidential information with other regulatory and/or professional organizations, referrals of potential misconduct are often made.

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How does the consumer determine if their complex vehicle is fully covered/fixed in the event of a claim?

The Nevada Division of Insurance encourages consumers to read the text of their automobile insurance policies in full to understand what is covered and what is excluded. What and how much the insurer will cover will depend on the coverages purchased by the consumer, the applicable limits of coverage and deductibles (if any), and the conditions and exclusions within the policy. Consumers should also contact their agent, broker or insurance company with specific questions about their policy. 

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Would preventing vehicles (with expired plates and non-insurance) on the road reduce insurance premiums? Is the rule follower with insurance paying for those who choose not to carry insurance?

If more people were driving without required liability insurance, this would mean that the risk of loss from uninsured motorists would be higher, and this could be reflected in higher losses paid by insurers under Uninsured/Underinsured Motorists (UM/UIM) coverage. UM/UIM coverage is optional to purchase in Nevada, but per NRS 687B.145(2), your insurance company must offer this coverage to you in an amount equal to your own liability limits. However, you do not have to accept the offer. Many Nevadans do choose to purchase this coverage precisely to protect themselves in the event that they experience an accident where an uninsured or underinsured motorist is at fault.

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How do we get legislation passed to stop people from running red lights? I think the penalty should be BIG and enforcement should happen.

The Nevada Division of Insurance is unable to opine on non-insurance policy that would be implemented through legislation. However, running red lights is already illegal and would be considered a misdemeanor and a moving violation that could lead to up to four demerit points on an individual's driving record. It is the role of law enforcement and the judicial system to appropriately address these violations. Insurers do consider such violations in the rating of automobile insurance policies, and an insured who has run a red light would often be surcharged significantly relative to an insured with a clean driving record.

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Where can I get more information on auto insurance? 

• Contact your broker, agent or insurance company.
• Contact the Nevada Division of Insurance:

Northern Nevada
State of Nevada
Department of Business & Industry
Division of Insurance
1818 E. College Parkway, Suite 103
Carson City, Nevada 89706
(775) 687-0700
Toll-Free in Nevada: (888) 872-3234
E-mail  

Southern Nevada
State of Nevada
Department of Business & Industry
Division of Insurance
3300 W. Sahara Ave., Suite 275
Las Vegas, Nevada 89102
(702) 486-4009
Toll-Free in Nevada:
(888) 872-3234
 E-mail  

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