Nevada drivers sue insurance companies over pandemic rates

Ten class-action lawsuits filed Tuesday accuse auto insurance companies of failing to reduce premiums sufficiently for Nevada policyholders as traffic declined during the pandemic.

“With fewer people driving fewer miles, there are fewer automobile accidents and, therefore, fewer automobile insurance claims,” the suits state. “The COVID-19 pandemic has thus led to a dramatic reduction in automobile insurance claims by Nevada residents.”

In the early part of Gov. Steve Sisolak’s stay-at-home order last year, statewide traffic volumes dwindled to as much as 70 percent in some areas compared with the same period a year earlier.

Yet insurance companies did not “provide and charge a fair and appropriate insurance premium,” according to the complaints filed by the Las Vegas firm Eglet Adams and Reno trial attorney Matthew Sharp.

“There’s very little risk, or much less risk, now than there was before COVID,” attorney Robert Eglet told the Las Vegas Review-Journal on Tuesday. “So, they’re making record profits on the backs of Nevada consumers, who many of are hurting, who have lost their jobs, who have to stay home, or can’t work because their kids are in school.”

The lawsuits filed in Clark County District Court name State Farm, USAA, Geico, Acuity, Liberty Mutual, Farmers, Progressive, Travelers, Nationwide and Allstate. The suits allege breach of contract, bad faith and a violation of Nevada’s Deceptive Trade Practices Act.

Allstate issued the following statement on Wednesday in response to the lawsuit naming that company:

“Allstate was the first insurer to respond to decreasing auto accidents in March by providing customers with Shelter-in-Place Paybacks of nearly $1 billion, which helped lead the insurance industry to provide widespread financial relief to drivers. Since then we have continued to support our customers with broad reductions in auto insurance rates that will continue beyond the pandemic.”

On Tuesday, a State Farm spokesman issued a response to the complaint naming that company.

“The filing of a lawsuit does not substantiate the allegations within the complaint,” the statement said. “We’ve recently learned about the filing, and it is premature to comment at this time.”

A spokesman for Liberty Mutual said the company does not comment on matters in litigation.

Phone calls and emails to the other companies were not returned Tuesday.

Eglet could not place a dollar figure on the lawsuits but said millions of people could be plaintiffs in the class. Any Nevadan with a car insurance policy from one of the 10 companies could be an eligible member of the class, he added.

Lawyers contend in the complaints that reduced driving, crashes and claims “will almost certainly continue for the foreseeable future, and for as long as the COVID-19 crisis continues.”

The lawsuits seek to reimburse policyholders retroactively for premium payments, while also potentially adjusting future rates, Eglet said, as more people continue to reduce vehicle travel.

“It’s just like most of the problems with corporate America,” he said. “They don’t do the right thing until they’re forced to do it. Most of the time they’re forced to do it by either regulation or lawsuits.”

While some insurers dropped rates as much as 25 percent, the suits allege that was “insufficient” to match the reduction in driving time, distance and claims.

“They did that for public relations purposes, to make themselves look good,” Eglet said. “All the while, the discount was a woefully minimal amount, nowhere near covering the amount it should have been.”

Eglet represented thousands of victims of the Route 91 Harvest festival shooting in litigation against MGM Resorts International, owner of the festival venue and Mandalay Bay, where the gunman was situated. A judge approved an $800 million settlement for the victims on Sept. 30, a day before the third anniversary of the mass shooting.

Contact David Ferrara at dferrara@reviewjournal.com or 702-380-1039. Follow @randompoker on Twitter.