Class action lawsuits filed against auto insurers in Nevada over pandemic rates

Ten major auto insurance companies are facing class action lawsuits from customers who claim that the firms unfairly charged excessive insurance premiums during the pandemic.

The Associated Press reported that the legal actions filed Tuesday argue that while some insurers did provide discounts following a drop in accidents and claims amid the pandemic, the price reductions did not offer “any meaningful relief that actually reflects the reduction in cars on the road and reduced driving during the pandemic.” 

The lawsuits add that the companies, which include State Farm, USAA, Geico and Liberty Mutual, violated Nevada state law that protects residents from being charged excessive premiums.

The legal actions also include allegations against companies Acuity, Farmers, Progressive, Travelers, Nationwide and Allstate.

State Farm, the largest auto insurer in the United States, said in a statement to the AP, “The filing of a lawsuit does not substantiate the allegations within the complaint.”

“We’ve recently learned about the filing, and it is premature to comment at this time,” the insurance company added.

Meanwhile, USAA spokesman Matt Hartwig said the company was reviewing the lawsuit, adding that “on three occasions in 2020, USAA returned dividends totaling $1.07 billion to all auto insurance policy holders due to fewer drivers on the road because of the ongoing pandemic.” 

Nationwide told the AP, “We know customers want fair rates and agents are seeking stability,” and that the company “is taking the longer view while continuing to monitor consumer driving behaviors and how they impact future miles driven and accident frequencies.”

Liberty Mutual declined to comment when contacted by the AP.

Allstate said in a statement shared with The Hill that it 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,” Allstate added.

Progressive told The Hill that while it does not comment on pending litigation, “we’re sensitive to COVID-19’s impact on our customers, employees, agents and communities, and we’ve worked hard to assist them in meaningful ways throughout the pandemic,” adding that it gave customers more than $1.1 billion in premium credits and rate relief. 

Progressive added that it has also “reduced rates by more than $800 million countrywide on an annualized basis. This includes rate reductions in Nevada last summer that translate to more than $25 million in annualized savings for Nevada drivers.”

Farmers declined to comment when contacted by The Hill.

The Hill has also reached out to Travelers for comment. 

Robert Eglet, lead counsel for the law firm Eglet Adams, which filed the lawsuits, said Tuesday that the discount rates provided by the auto insurance companies did not adequately reflect the improved driving conditions during the pandemic as stay-at-home orders have led to less people on the roads, resulting in a decline in traffic and crashes in several states. 

Auto insurance companies last year announced varying discounts in response to pandemic conditions, with Acuity offering a $50 to $100 one-time refund, while State Farm offered a 25 percent discount. 

However, Eglet told the AP the discount rates could have been as high as 50 to 60 percent. 

“These discounts that were given, were just totally woefully inadequate,” the attorney argued. 

The lawsuits claim the Nevada-California border saw 66 percent less traffic in April 2020 than at the same point a year prior, and that there was a 60 percent decline in automobile accidents in southern Nevada in March 2020 when compared to March 2019.

Updated: Feb. 25 at 5:14 p.m.