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Class-action lawsuits filed in Nevada against car insurance providers amid pandemic

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Posted at 10:41 PM, Feb 23, 2021
and last updated 2021-02-25 17:00:33-05

LAS VEGAS (KTNV) — Multiple class-action lawsuits have been filed in Clark County District Court by the Las Vegas law firm Eglet Adams and Reno trial lawyer Matthew L. Sharp, seeking class-wide relief for the Defendant insurance companies’ failure to provide and charge a fair and appropriate insurance premium and failure to provide premium reductions to its Nevada automobile insurance policyholders amid the COVID-19 pandemic.

The class-action lawsuits have been filed against State Farm, USAA, Geico, Acuity, Liberty Mutual, Farmers, Progressive, Travelers, Nationwide, and Allstate.

The suits allege that Nevadans faced substantial life changes beginning on March 1, 2020, due to the COVID-19 pandemic, which included driving less frequently and driving shorter distances. This resulted in less traffic, fewer automobile accidents, and a dramatic reduction in automobile insurance claims. The lawsuit further alleges that this significant drop in driving, collisions, and automobile insurance claims will continue for the foreseeable future and for the duration of the pandemic.

"A lot of people, companies, and employees are continuing to work remotely. They’re not going to the grocery store. They’re having everything delivered. They’re not going out to dinner. They’re not going to sports events or concerts or anything like that," said Robert Eglet, a lawyer at the Law Office of Eglet Adams in Las Vegas. "Certainly during the lockdowns, but even continuing after the lockdowns in Nevada, as well as other states, people are driving significantly less. They’re just not driving as much."

The class-action lawsuits claim that the insurance providers charged their insureds excessive premiums as a result of the providers’ failure to accurately calculate the cost of premiums based on their insureds’ decreased driving routines and the significantly reduced quantity of automobile accident claims due to the pandemic. Under Nevada Law, insurance providers may not charge excessive premiums.

The lawsuits further allege that the insurance providers provided paltry credits and refunds to their insureds that are inadequate given the excessive premiums that Nevadans have been paying during the pandemic.

"Under Nevada law, the insurance companies are regulated here and they’re not permitted under statutory law to charge an insurance premium that is excessive. As a result of COVID and restrictions, the frequency and severity of claims incurred by the insurance companies has dramatically reduced ​and​ ​are​ significantly less than what was anticipated when the premium was charged.​​ I’ve been waiting for these insurance companies all year to do something. And ​they've made these token discounts, anywhere from a one-time $50 payment to as much as 15%-20% for only two months, which is woefully insufficient to account for the significant drop in claims," said Eglet.

The lawsuits bring forth five causes of action including Declaratory Relief Pursuant to NRS 30.040, Breach of Contract, Breach of the Covenant of Good Faith and Fair Dealing (Contract), Bad Faith, and Violation of Nevada’s Deceptive Trade Practices Act.

The lawsuits seek compensatory and punitive damages, all attorney fees and costs, and any further relief that the Court deems just and appropriate.

13 Action News reached out the various insurance companies for their responses.

USAA sent the following:
We are currently reviewing the lawsuit. On three occasions in 2020, USAA returned dividends totaling $1.07 billion to all auto insurance policy holders due to fewer drivers on the road because of the ongoing pandemic.

Nationwide sent this statement:
We are aware of the complaint and prepared to vigorously defend our position in court.

Statement from State Farm:
The filing of a lawsuit does not substantiate the allegations within the complaint. We’ve recently learned about the filing, and it is premature to comment at this time.

Statement from Allstate:
Allstate was the first insurer to respond to decreasing auto accidents in March by providing customers with Shelter-in-Place Paybacks of nearly $1 billion, which helped lead the insurance industry to provide widespread financial relief to drivers. Since then we have continued to support our customers with broad reductions in auto insurance rates that will continue beyond the pandemic.

Progressive sent this statement:
While we won’t comment on pending litigation, we’re sensitive to COVID-19’s impact on our customers, employees, agents and communities, and we’ve worked hard to assist them in meaningful ways throughout the pandemic. Since the COVID-19 outbreak, we’ve provided our customers over $1.1B in premium credits and rate relief, and have also reduced rates by more than $800M countrywide on an annualized basis. This includes rate reductions in Nevada last summer that translate to more than $25M in annualized savings for Nevada drivers.

Liberty Mutual Insurance responded that they do not publicly comment on matters of litigation.

Eglet says, even though some companies, like Allstate, have given back nearly a billion dollars to customers, it's a small fraction of the profit they've made during the pandemic, and not enough to help their struggling customers.

"They’re making record profits off of this and they’re making record profits off of the backs of their own customers, who many, if not most of them, are suffering financially and struggling during COVID. And yet, they’re being required to pay the same amount for their insurance premiums they did pre-covid, with significantly less driving and less claims," said Eglet.

Eglet says the companies he's suing represent about 90% of Nevada's drivers. So, if you're interested in joining these class action lawsuits, he recommends you send his law firm an email or give them a call at (702) 450-5400.