In what will certainly be seen as a windfall by lower-income earners in Nevada, the Assembly has recently approved a new low-cost auto insurance change that will result in lower premiums, but also slightly lower cover in the event of bodily injury and death.
As it currently stands, state law requires that insurance policies covering vehicles include $15,000 cover for injury or death per person, and $30,000 for two or more people. It also requires policies to include $10,000 cover for damage to personal property.
The new law will lower this to $10,000 per person per accident, up to a maximum of $20,000 for two or more people in any one accident. The cover for damage to property has been lowered from $10,000 to only $3,000. This comes after data on insurance claims indicated that a lower cover for property damage was appropriate for older, less expensive vehicles.
Bill A.B 299, which introduces the Low Cost Automobile Insurance Pilot, will likely result in a considerable reduction in insurance premiums for the state’s lowest earners. This comes at a time when the global recession has reduced incomes in these families by possibly a greater percentage than most income groups in the state.
Section ten of the bill outlines who qualifies for the new insurance pilot program. It first stipulates that the insurance policy must meet the minimum requirements for a recognised third party insurance policy, and then goes on to state that the policy holder must fall below the federal poverty line, and that their vehicle must not be worth more than $20,000.
The insurance industry has welcomed the bill, but some critics are labelling it ‘premature’, saying that motorists are more concerned with price than with coverage, and that the pilot may lead to many more claims where not all of the damage to the owner’s vehicle is covered.