Recently class action lawsuits have been filed in Nevada against ten major auto insurers over premiums charged during the pandemic. The suits claim that insurers failed to account for a drop in driving and auto accidents, and that rates should have been adjusted accordingly. While acknowledging that some insurers dropped rates and offered some refunds, the suits are claiming that the reduced rates weren't sufficient and violated state regulations against excessive premiums.

Suits have been previously filed in Illinois for the same reason; with belief that the drop in traffic and accidents during the course of the pandemic did not result in a large enough decrease in premiums to the insureds, netting the insurance industry millions of dollars in extra profits.

The suits highlight a large misunderstanding about insurance and how it is rated. A drop in exposure for a few months, or even a year, in general isn't long enough to affect rates substantially. There are always hail storms, floods and other types of other than collision losses, and while accidents may have declined in some areas, other areas reported more severe accidents because people were driving faster than normal since fewer people were on the road. Because these suits are apt to generate a lot of attention, we asked the board members to weigh in on this issue.