Auto Rates in Las Vegas
It's not a secret...
Las Vegas auto insurance rates are among the very highest in the country. When you see published statistics, they always seem to show rates by state and Nevada is somewhere in the top 10. But, if they showed rates by zip code, you would find Las Vegas in the top 5 most of the time. Why? The answer is simple. Claims. That's it in a nutshell, but I know it's not very satisfying, so let me elaborate. Rates are set and then adjusted periodically based on claims incidents within certain geographical areas. Since the US Post Office was so nice to divide the entire country up by zip code, that's what insurers use to decide where they are paying out the most in claims and where they are paying out the least. When the money goes out to pay, the money has to come back in to have the reserves needed by state regulations. Therefore, if you live and drive in an area where many claims are made, then you will likely pay higher premium rates. You can, however, help yourself if you know what the factors are that go into determining your rate. Here are some of the most relevant ones:
1. You. Your age, gender, marital status, driving record, and record of prior claims play a major role in determining your risk level and therefore the premium you will pay. Traditionally, males under 25 years of age represent the highest risk, while married, middle-aged, non-smoking mothers represent the lowest. Drivers under age 25 are involved in more accidents than any other age group, and car crashes remain the leading killer of people ages 15 to 20. And amid these accident-prone younger drivers, it's the male drivers who tend to cause more of the accidents. Therefore, young males pay higher rates than young females. It's just based on data, not prejudice.
2. Where you live and drive. As I discussed in the opening paragraph, the country is broken down into areas and statistics are kept on the number of claims reported in what geographical areas. As the claims go up, the rates follow. But, the change isn't instantaneous. In most states (like Nevada), the insurance company has to file proposed rates with the state insurance commissioner and they have to be approved before they can change. So, it might take many months or even years for rates to change dramatically. Rates also tend to be higher in urban areas because of the higher density of traffic, increased likelihood of theft and vandalism, and greater incidence of fraud. The risk factors vary, of course, but if you lived in places like Detroit, Philadelphia or Los Angeles you would pay much higher rates than you would, say, in rural Montana.
3. The type of car you drive. This is a very important element and one that is often overlooked when car shopping. Vehicles that have a high frequency of claims (sports cars) or are expensive to repair (luxury cars, SUVs) are prone to higher premiums. But it is important to note that you can cause as much damage in an old "junker" as you could in a new Lexus if you are at fault. That's why liability insurance doesn't vary as much as you might think. It's the collision and comprehensive coverage that goes up dramatically as the car gets fancier and faster.
4. How you use your vehicle and how much do you drive it. Statistically, the more miles you drive, the greater chance you have of being involved in a crash. High annual mileage will result in higher premiums. Sound simple? Maybe, but it can get complicated if you use your vehicle for a mix of business and pleasure. I don't mean driving to and from work, but actually using it to do business like hauling materials or people as part of your occupation. There is a line between what insurers call business-use and pleasure-use and you should be aware of the differences if you use your vehicle to get your job done.
5. Credit-based insurance score. Oh, I know the complaints here. They have been bantered about in the industry and even in state legislatures for years. And the likelihood is that the debate will continue well into the future. The bottom line is that there is a valid statistical correlation between this insurance score and the number and severity of claims submitted. Again, just like the young male drivers, there is no prejudice here; it's simply sound statistical analysis. More claims, mean higher premiums. I have a brochure here in the office put out by the National Association of Independent Insurers (NAII) that explains the details. The next time you come by, ask for one. If you don't want to come by, I might be convinced to send you one by e-mail if you ask.
Those are the big 5 in a nutshell, but there are even more. And every insurer is different! And every state is different! The combination of possible factors staggers the imagination. That's why you need us. A trusted agent to help you unravel the mystery. We're here for you.