Nevada puts brakes on auto insurance discount program

Jill Overmyer

Uninsured drivers are a growing problem in the United States. According to the Insurance Research Council, about one in seven U.S. drivers is uninsured.

In an effort to encourage these drivers to get auto insurance, Nevada lawmakers considered Assembly Bill 299 during the 2011 legislative session. The bill, which passed the state's Assembly before dying in the Senate, proposed allowing drivers below a certain income level to purchase insurance with lower coverage levels. Although the bill never became law, it raised interesting questions about whether states should bend the rules for some citizens.

Bill 299 basics

Current Nevada law requires drivers to have a minimum of $15,000 in bodily injury liability coverage per person ($30,000 per accident) and $10,000 in property damage coverage. Had A.B. 299 become law, drivers who met certain requirements could have purchased discounted insurance with less coverage. The bill proposed lowering limits to $10,000 per person in bodily injury coverage ($20,000 per accident) and $3,000 in property damage coverage. Because lower limits decrease the amount an auto insurance company pays out in the event of an accident, these drivers' premiums would have dropped as well.

To qualify for these lower limits, drivers would have been required to have family incomes of less than 250 percent of the federal poverty level and cars worth less than $20,000. The bill's provisions also included requirements for a clean driving record -- no at-fault accidents involving injury or death within the past three years, for example.

The bill was modeled after a similar program in California. The California Low Cost Automobile program offers qualified low-income drivers premiums of less than $300 a year in some counties.

Pros and cons of Bill 299

The introduction of Bill 299 brought both praise and criticism. The main purpose of the bill was to make coverage more affordable for those who would otherwise go uninsured. In Nevada, an estimated 13 percent of drivers are uninsured, according to the Insurance Research Council. Creating a low-cost auto insurance program, supporters argued, would encourage more drivers to get insurance and ensure accident victims aren't left with huge bills after run-ins with uninsured drivers.

Opponents of the program thought it would be unfair to use taxpayer dollars to finance a program that may not have any real influence on the number of uninsured drivers -- and that only some drivers in the state could use.

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