Many factors determine car insurance rates
Buying a red car does not mean higher auto insurance rates.
It is a myth many valley insurance agents said they often hear. The most persistent myth is that all insurance companies offer the same rates, according to Rajat Jain, assistant chief of the property and casualty section at the Nevada Division of Insurance .
“Something most consumers don’t know is Nevada is a highly competitive state for these companies,” Jain said. “Because of the business-friendly policies this state has adopted, 150 companies wrote business for personal auto insurance. If they’re not satisfied with their current rates, consumers should shop around.”
With the valley’s 24-hour lifestyle, Strip revelers and dense population , it has some of the highest auto insurance rates in the nation.
The large number of attorneys practicing in the valley also plays a role in inflating insurance rates, Jain said. Insurance providers are forced to spend time and money in Clark County courts battling injury lawsuits, resulting in higher costs for medical liability coverage.
Jain also said because of the large amount of insurance providers, consumers benefit from shopping around.
An agent from a local branch of a national insurance company who wished to remain anonymous said every company uses different calculations to determine a prospective client’s risk to determine his rates.
The calculations are proprietary, the agent said, meaning the company protects its formulas and methods. It is its most important asset, he said, and they have become more complicated every year.
Insurance providers commonly look for a consumer’s driving record, geographical location, sex, age, marital status, prior insurance coverage, make and model of the vehicle, vehicle use and in some cases, credit score.
The state Division of Insurance is charged with regulating insurance providers in Nevada. Any insurance rate changes, whether an increase or decrease, must be reviewed by the office before hitting the streets.
Jake Sunderland, a spokesman for the division, said its website, doi.nv.gov, offers a yearly consumer guide for those in the market for auto insurance. The guide offers a comparison of rates from the top 10 companies in the state. The guide uses different scenarios, such as a 30-year-old divorced woman driving a 2011 Hyundai Sonata, as examples.
What it doesn’t offer is a geographical average, such as the average Henderson rates compared to those of North Las Vegas. It is not feasible.
“When it comes to rating insurance, so many factors and variables come into play,” Sunderland said. “It is impossible to nail down an average. We simply don’t do it.”
Jain recommended that before handing over any personal information , consumers should check his office’s website to make sure insurance companies are licensed through the Division of Insurance.
“It really benefits to shop around,” he said. “Check to make sure the company is licensed, research how good a company is at paying claims and ask, ‘ Which policy fits my needs ?’ They are not identical. I can tell you that much.”
The Nevada Division of Insurance’s consumer guide can be downloaded from the office’s website . A hard copy can be obtained at the division’s Las Vegas office, 2501 E. Sahara Ave.
For more information, call 702-486-4009 .
Contact Paradise/Downtown View reporter Nolan Lister at nlister@viewnews.com or 702-383-0492.
