Ten insurance companies are facing lawsuits in Nevada over allegations that they have overcharged their auto insurance customers during the pandemic.
Las Vegas-based law firm Eglet Adams and Reno, NV attorney Matthew Sharp each filed lawsuits in a Las Vegas court on behalf of Nevada policyholders against 10 insurers – Acuity, Allstate, Farmers, GEICO, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers, and USAA. Forbes reported that the lawsuits are seeking class action status in Nevada.
The lawsuits maintain that in April 2020, traffic at the Nevada-California border saw a year-over-year drop of 66%. They also claim that the number of auto accidents in southern Nevada fell 60% in March 2020 from March 2019. But despite this, the lawsuits argued that the auto insurance premium adjustments, credits, and refunds failed to accurately account for the decline in vehicle traffic and collisions during the pandemic.
Both lawsuits also noted that Nevada law prohibits insurers from charging “excessive” insurance premiums.
The trade group American Property Casualty Insurance Association (APCIA) has issued a statement decrying the lawsuits, saying that the plaintiffs’ attorneys are “misconstruing” traffic and auto insurance data. The association also said that in 2020, auto insurers offered over $14 billion in refunds and credits to policyholders due to the reduction in driving activity during the pandemic.
Several of the insurers named as defendants have responded to the allegations.
A spokesperson for Allstate told Forbes that the company was the first insurer to respond to a drop in auto accidents, providing refunds of up to $1 billion.
A representative for Progressive explained that while the company does not comment on pending litigation, it gave customers over $1.1 billion in premium credits and rate reductions due to the pandemic. The company also said that rate reduction last summer in Nevada alone led to over $25 million in annualized savings for drivers.
USAA’s spokesperson said that the company is reviewing the suits, and that the company returned $1.07 billion to customers last year.
On the other hand, Farmers, Liberty Mutual and State Farm declined to comment on the suits, while Acuity, GEICO, Nationwide and Travelers could not be reached by Forbes for comment.