Ten class action lawsuits filed Tuesday accuse auto insurance companies of failing to cut premiums enough for Nevada policyholders because traffic declined during the pandemic.
“With fewer people driving fewer miles, there are fewer car accidents and therefore fewer auto insurance claims,” the lawsuits state. “The COVID-19 pandemic has led to a dramatic reduction in auto insurance claims by Nevada residents.”
In the first part of Governor Steve Sisolak’s stay-at-home order last year, traffic volumes across the state were down as much as 70 percent in some areas compared to the same period last year.
However, the insurance companies did not “provide or charge a fair and adequate insurance premium,” according to complaints filed by Las Vegas firm Eglet Adams and Reno trial attorney Matthew Sharp.
“There is very little risk, or much less risk now than before COVID,” attorney Robert Eglet told the Las Vegas Review-Journal on Tuesday. “So they are making record profits at the expense of Nevada consumers who many of them are suffering, who have lost their jobs, who have to stay home or cannot work because their children are in school.”
The lawsuits filed in Clark County District Court are called State Farm, USAA, Geico, Acuity, Liberty Mutual, Farmers, Progressive, Travelers, Nationwide, and Allstate. The lawsuits allege breach of contract, bad faith and a violation of the Nevada Deceptive Business Practices Act.
A State Farm spokesperson responded to the complaint by naming that company.
“The filing of a lawsuit does not substantiate the accusations within the complaint,” the statement said. “We recently learned of the presentation and it is premature to comment at this point.”
A Liberty Mutual spokesperson said the company does not comment on disputed matters.
Phone calls and emails to the other companies were not returned Tuesday.
Eglet was unable to put a dollar figure on the lawsuits, but said millions of people could be part of the class. Anyone with a car insurance policy from one of the 10 companies could be an eligible member of the class, he added.
The attorneys contend in the complaints that the reduction in driving, crashes and claims “will almost certainly continue for the foreseeable future, and as long as the COVID-19 crisis continues.”
The lawsuits seek to retroactively reimburse policyholders for premium payments, while also potentially adjusting future rates, Eglet said, as more and more people continue to reduce vehicle travel.
“It’s like most of the problems with American companies,” he said. “They don’t do the right thing until they are forced to. Most of the time they are forced to do it by regulations or lawsuits ”.
While some insurers lowered rates by as much as 25 percent, the lawsuits allege it was “insufficient” to match the reduction in driving time, distance and claims.
“They did it for public relations purposes, to look good,” Eglet said. “All along, the discount was a woefully minimal amount, nowhere near 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 located. A judge approved an $ 800 million settlement for the victims on September 30, a day before the third anniversary of the mass shooting.