Lawmakers probe steep auto-insurance increases as commissioner cites 13.17% spike
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Summary
Insurance Commissioner Ned Gaines told the interim Committee that Nevada saw a 13.17% combined auto-premium increase in 2023 and outlined drivers including parts shortages, higher repair and medical costs, theft and fraud; NCOIL counsel recommended options ranging from personalized auto pools to fraud units.
Nevada legislators pressed state insurance officials on rising automobile insurance costs and asked for more localized data as the committee weighed policy options.
Insurance Commissioner Ned Gaines told the Joint Interim Commerce and Labor Committee that, using the most recent NAIC data available, Nevada’s combined average personal automobile premium rose by 13.17% in 2023. Gaines said the Division of Insurance (DOI) is reviewing rate filings under Nevada’s prior-approval system and has begun compiling a historical premium log the division previously lacked.
Gaines listed several cost drivers: pandemic-era supply-chain disruptions that delayed repairs and increased parts costs; higher repair times and rental reimbursements; advanced vehicle technology and safety systems that raise repair costs; sustained increases in medical care costs; and persistent automobile fraud, particularly in Southern Nevada. “Vehicle thefts… surged beginning in 2022 and significantly increased comprehensive coverage losses,” he said.
Both the commissioner and Krista Rappaport, general counsel for the National Council of Insurance Legislators (NCOIL), pointed to Las Vegas’s concentrated urban risk profile as a major factor. Rappaport summarized her analysis: Nevada’s “perfect storm” includes density, a 24/7 entertainment economy with higher DUI and distracted-driving incidence, elevated theft rates, rising repair and medical costs, litigation and local weather effects. “The biggest levers are density, theft, DUIs, weather, litigation, road design, and uninsured motor risk,” she said.
Committee members asked several practical questions: whether DOI can distinguish accidents involving out-of-state drivers, how territories are defined (statewide base rates with territorial rating factors that can be as granular as ZIP code with actuarial justification), and whether SR-22 requirements duplicate DMV verification (NV Live). Gaines said DOI does not currently have some of the requested breakdowns but will research them and provide data. He agreed to deliver a ZIP-code/neighborhood breakdown and other requested metrics by June.
On policy options, Rappaport outlined measures used in other states: low-cost programs for lower-income drivers, strengthened enforcement against uninsured motorists, telematics and usage-based programs that reward safer drivers, fraud units and data-sharing to address staged accidents, and liability-reform options including modified no-fault structures. Rappaport and Gaines both emphasized that each state’s unique mix of factors means reforms should be tailored to Nevada.
Next steps: Gaines committed to returning with the requested data and a written description of the DOI’s rate-approval process. The committee did not take formal votes at this session.