Farmers Insurance makes request for statewide rate hike

Thursday, June 20, 1996 | 11:59 a.m.

CARSON CITY -- Farmers Insurance, the second largest insurer of automobiles in Nevada, has asked the state for permission to raise rates an average of 23.1 percent starting in October.

The request is higher for Las Vegas-area motorists.

The company submitted a 13.3 percent rate increase request in February, but state Insurance Commissioner Alice Molasky tossed out that application on grounds that the company inflated its future losses.

The company, which insures 172,366 vehicles in Nevada, got its last rate increase, 9.7 percent, in April 1995.

If approved, this latest request would bring in an extra $30.4 million a year.

"We've been losing $16 million a year in our auto business in Nevada," said Diane Tasaka, director of corporate communications for Farmers in Los Angeles.

Tasaka noted the company put a moratorium on new business earlier this year because of the losses. "Basically we're bleeding and we have got to take some action to stop the bleeding."

The company, she said, is installing cost controls to cut expenses, but nobody can stay in business under the current conditions, she said.

The more than 99,000 motorists insured by Farmers in Clark County would be hit the hardest by the proposal.

In urban Las Vegas, Farmers seeks to boost bodily injury and property damage coverage -- required by state law -- by 42.9 percent. In suburban Las Vegas, the coverage would jump 40.7 percent. In the balance of Clark County, it would skyrocket 97.7 percent.

For urban Las Vegas, where there are 26,750 cars insured, premiums for uninsured motorist coverage would go up 89.9 percent, collision 14.9 percent and medical 98.5 percent. The company says comprehensive premiums would decrease 23.9 percent.

Farmers insures 61,725 cars in suburban Las Vegas. In that area, the company proposes a 79.9 percent increase in uninsured motorist, 24 percent in collision and 114.3 percent in medical. There would be a 1.8 percent decrease in comprehensive.

In the balance of Clark County, where there are 10,864 cars insured, Farmers wants increases of 43.6 percent in uninsured motorist, 39.4 percent in collision and 52.6 percent in medical. There would be a 17.9 percent decrease in comprehensive.

Farmers' sister company, Mid-Century Insurance Co., filed an application to boost rates by 14 percent statewide. It covers 32,031 autos with about 21,000 of them in Clark County.

Molasky can order hearings to require Farmers to submit evidence these new rates are justified.