Western United to Offer Pay-As-You-Drive Insurance in Nevada

June 3, 2009

Western United Insurance Co., which also does business as AAA Nevada Insurance Co., will be offering pay-as-you-drive auto insurance in Nevada.

According to the Nevada Division of Insurance, which approved the rate filing, the “usage-based” auto insurance will use mileage and other driving statistics to create potential discounts, potentially giving drivers an opportunity to save on their premiums.

AAA policyholders who voluntarily participate in the program will receive a discount on their auto insurance. To participate, policyholders must agree to self-install a small, non-GPS device in their vehicle’s on-board diagnostics port that will record information about their mileage, as well as how often and how fast they drive, the DOI said. The data collected will be available to policyholders on the Internet. And, policyholders will be able to select the vehicles in which they prefer to install the device. Policyholders who drive less than 10,000 miles annually will receive an additional discount at renewal.

Some of the additional features of the changes in the company’s filing with the DOI include:

  • Moving from territoriy-based pricing to ZIP code pricing,
  • Introduction of an incremental loyalty discount based on the combination of the length of AAA auto club membership and auto insurance tenure, and
  • A new rating factor comprising of home ownership, the household composition of the number of drivers and youthful drivers, and the number of vehicles.

Military personnel who are deployed overseas will also continue to enjoy loyalty discount benefits upon their return to the United States.

Western United has experienced underwriting losses in the past few years, the DOI said. Increased frequency and severity of losses, combined with the increased cost of medical expenses have partly contributed to the worsening bodily injury loss experience of the company, Commissioner Scott Kipper said. He noted that about 43 percent of the Western United’s policyholders will see a rate decrease, while the rest will either see no change or a rate increase from the implementation of the rate filing.

Source: DOI

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