Do You Know How Auto Insurance Rates Are Determined?

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    July 17 2020

    How Do Nevada Auto Insurance Companies Determine Your Rate?

    Do you know how insurance companies determine how much you will pay for insurance? All drivers in Nevada must purchase auto liability insurance. In these uncertain times, it is important to understand how insurance companies determine your rate as well as potential discounts that may be available. Insurance may help in the event of an accident.

    If you are the victim of an accident, you need an experienced personal injury lawyer. A personal injury lawyer will deal with the insurance companies and get you compensation to pay for your medical bills. The law firm of Anthem Injury Lawyers has a dedicated team of personal injury lawyers and staff ready to help you with your case. Contact us today at (702) 857-6000 to make an appointment for a free consultation.

    What Are Nevada’s Auto Insurance Requirements?

    Liability insurance may help pay for the injuries and property damage that you cause to another party. If you own a car and live in Nevada, you are required to maintain a minimum automobile liability insurance policy of:

    • $25,000 for bodily injury or death of one person in any one accident;
    • $50,000 for bodily injury or death of two or more persons in any one accident; and
    • $20,000 for injury to or destruction of property of others in any one accident.

    What Are the Average Expenditures for Nevadans?

    If you are curious how much Nevadans spend on auto insurance, the National Association of Insurance Commissioners reports average expenditures by state. For 2017, it reported the following average expenditures for auto insurance for Nevadans:

    • Liability $798.52
    • Collision $344.81
    • Comprehensive $115.46

    What Determines What You Pay for Auto Insurance?

    Insurance companies analyze two factors to determine what you pay for auto insurance:

    • Underwriting
    • Rating

    Insurance companies underwrite to determine whether or not to accept a consumer as a risk and the conditions of the acceptance. Insurers use ratings to determine the premium a consumer will pay.

    How Do Nevada Auto Insurance Companies Determine Your Rate?

    There are over 140 companies offering auto insurance in Nevada. According to the Nevada Division of Insurance, insurance companies use a variety of factors to determine the cost of auto insurance. Insurance companies will request information to determine your rating. Your rating is the determination of premium based on several risk characteristics including:

    • Driving record
    • Geographic area
    • Gender
    • Age
    • Marital status
    • Prior insurance coverage
    • Vehicle use
    • Usage-based insurance
    • Make and model of vehicle
    • Credit-based insurance scoring

    Don’t let the complexities of insurance ruin your day! Anthem Injury Lawyers understands how to deal with insurance companies, especially if you’ve been the victim in an accident caused by another. Call us now to schedule your free case review: (702) 857-6000. Our car accident lawyers know how to get you the compensation you deserve for your injuries.

    Driving Record

    A consumer’s driving record includes accidents and traffic violations for the preceding three to five years. Insurers consider a driver to be a higher risk if the driver has previous violations or “at fault” accidents. If two drivers have similar characteristics, the person with traffic violations will pay more than the driver with a clean driving record.

    Geographic Area

    The claims history in a geographic area affects rates. Urban drivers generally pay higher auto insurance rates than drivers in small towns or rural areas. This is due to higher rates of thefts, vandalism, busy traffic, and accidents. To determine geographic area, the application will ask for the address where the driver will garage their vehicle.


    Statistics show that males have more accidents than females. Thus, males may pay more for insurance than females. The Insurance Institute for Highway Safety (IIHS) reports that males are more likely to:

    • Drive more miles than females.
    • Engage in risky driving practices including not using safety belts.
    • Drive while impaired by alcohol.
    • Speed.
    • Be involved in severe crashes.


    Statistically, certain age groups have higher numbers of claims. Younger drivers have more claims than older drivers. A person under 25 may pay more for insurance than a person over 35 years or older. When age is combined with gender, a young male will pay more for insurance than a young female.

    Marital Status

    Under Nevada law, insurers must rate domestic partners as married policyholders. Married policyholders tend to pay lower premiums than unmarried policyholders. This is because statistics indicate fewer auto insurance claims among married policyholders than unmarried policyholders.

    Prior Insurance Coverage

    An insurance company can ask if a consumer previously had insurance coverage. The insurer wants to know if the consumer has had any lapse in auto liability coverage and if their coverage has ever been canceled. Under Nevada law, if insurers ask for this information, they are required to ask the reason. Insurers may not refuse insurance or increase a premium solely based on this factor.

    Vehicle Use

    Insurance companies want to know how the consumer plans to use their vehicle. This includes how often, how far, and for what purpose the consumer plans to drive the vehicle. The more miles a consumer drives, the more chances of getting into an accident. Drivers using their car for work or long commutes pay more. Drivers using their vehicle on occasion or for “pleasure use” will pay less.

    Usage-Based Insurance (UBI)

    UBI allows for auto insurance premium discounts based upon the number of miles driven. Some companies use scheduled “odometer readings” to verify mileage while others require the use of a data-tracking device. Consumers who don’t drive much or who use other transportation options can save money with UBI.

    To help determine whether UBI fits a consumer’s driving habits, the National Association of Insurance Commissioners launched a new tool called DriveCheck. DriveCheck takes a driver through a few quick questions and provides more information about UBI. At the end, the driver receives an assessment on how likely it is they will benefit from UBI.

    Make and Model of Vehicle

    Consumers have discretion over the make and model of vehicle they are insuring. A safer model tends to carry less risk than a sporty car with a powerful engine. Cars with a high number of claims or higher claim costs will have a higher premium. Higher-valued vehicles have high claim costs because they are more expensive to repair. Vehicles with an accident history of severe bodily injury losses or physical damage losses also have higher claim costs.

    Credit-Based Insurance Scoring

    Some insurance companies assign a numerical score to consumers based on certain aspects of their credit history. The credit-based insurance score (CBIS) is different from the credit score used by lenders. Some insurance companies have their own method for determining CBIS while others use models developed by third-party vendors. This lack of uniformity can cause variation in the impact of a driver’s CBIS.

    It is important to understand how policies impact your insurance rates and coverage options. If you are a victim in an auto accident, contact an experienced car accident lawyer. An experienced lawyer can properly deal with insurance companies. The law firm of Anthem Injury Lawyers has a team of lawyers and staff ready to help you. Contact us today at (702) 857-6000 to make an appointment for a free consultation.

    Can You Qualify for a Discount?

    Insurance companies offer discounts to individuals based on a variety of characteristics. Not all insurance companies offer the same discounts. Below are some of the discounts that may be available when applying for insurance coverage:

    • Multiple vehicles
    • Driver education courses
    • Good student
    • Safety devices
    • Anti-theft devices
    • Good driver/loyalty
    • Multiple policy
    • Dividends
    • Miscellaneous discounts

    These are not all of the discounts that may be available to you. Different insurance companies offer different discounts. Depending on which discounts apply, you may be able to save money on your insurance policy. Ask around to find out what discounts are available for you.

    Does COVID-19 Affect My Insurance?

    In April 2020, the Nevada Division of Insurance announced that Nevadans will receive premium relief refunds for auto insurance policies. There have been less cars on the roads since Nevadans began to “Stay Home for Nevada.” Less cars on the roads means less claims being paid. In response, some auto insurance carriers paid back premiums to their consumers. Auto insurance companies provided premium refund credits, checks, dividends, and similar measures. Your insurance company would have notified you if it participated in providing a refund. You can count on Anthem Injury Lawyers to understand all the new nuances in the law due to COVID-19. Have you been the victim in a car accident in the Las Vegas area, caused by someone else? If so, give us a call now to schedule your free case review: (702) 857-6000.

    Experienced Las Vegas Personal Injury Lawyers

    If you were injured in a car accident that was not your fault, contact Anthem Injury Lawyers today. The law firm of Anthem Injury Lawyers has a dedicated team of lawyers and staff ready to help you with your case. We are located in Henderson, Nevada and serve clients all over the Las Vegas Valley. Contact us today at (702) 857-6000 for a free consultation.

    Published by Puneet K. Garg

    Attorney Puneet K. Garg is one of the founding partners of Anthem Injury Law. He has vast experience serving various clients with their different needs. Puneet’s representation of clients has included serving as counsel to Fortune 500 companies, large and small healthcare providers, celebrities, large and small businesses, personal injury victims and individuals needing help with their everyday needs. He has represented clients from all over the world in both state and federal court in Nevada.

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