Nevada Ranked 9th Most Expensive State for Car Insurance


An article in The Las Vegas Sun, a local newspaper based in Nevada, claims that Nevadans are paying for higher premium rates than most Americans.

Nevada Ranked 9th Most Expensive State for Car InsuranceAccording to the Sun’s analysis, state residents shell out more than $1,000 per vehicle year in and year out, based on 2006 data. The state effectively ranks 9th across the country with the figures an estimated 23 percent higher than the national average. Other high-cost states like New York and New Jersey have placed higher than Nevada.

According to some industry players and state officials, the high insurance rates are the result of failed public policy and bad decision-making on the side of the state’s residents.

Premium rates are calculated based on several factors: the rate of accidents and car theft, and the severity of the situation, or the dollar amount of claims.

Rajat Jain, an actuary for the Nevada Division of Insurance said that higher claim frequency and settlement would mean higher insurance costs.

Jain, however, warned against comparing the premium costs per car on a state-by-state basis, explaining that the method can be inaccurate and misleading given the different situations present in each state. Despite this, many Nevadans still believe that their premium rates are much higher than most of America’s. Experts, on the other hand, say that the state suffers from more incidents, and not more expensive incidents, than other states.

Nevada Insurance Council president and AAA spokesperson Michael Geeser says that the state has lots of car accidents because of too much distraction. He points out that the hectic lifestyle that Nevadans have, the easy access to alcohol, and illicit drugs have taken its toll on the state’s motorists.

State laws currently allow cell phone use by drivers. Not using a seat belt is not considered a primary offense and there is a dearth of police officers at junctions and intersections where most accidents occur.

Alcohol is also a suspected factor in the high insurance rates, with the substance involved in 36 percent of the state’s car accident fatalities. The national average stands at 26 percent.

Uninsured drivers also make up around 17 percent of the total motorists in the state, despite car insurance coverage a legal mandate. An estimated 14.6 of all drivers nationwide do not have car insurance.

A higher-than-average claims ratio is also believed to be a factor in Nevada’s high premium rates. The state’s residents file 39.7 injury claims for every 100 vehicular mishaps, compared with 24.5 claims for every 100 car accidents for the entire nation.