Farmers Insurance reports losses, wants increase

Monday, Jan. 26, 1998 | 10:37 a.m.

CARSON CITY -- Farmers Insurance Exchange says it has lost $92.9 million in Nevada in the past 10 years -- $8.5 million in 1996 alone.

The company says that's the justification for raising its rates by an average 1.9 percent on the 176,416 vehicles it insures in Nevada. In Clark County the rate increases will be higher.

The loss-profit figures were not disclosed for 1997. Farmers says it wants to collect $2.6 million extra in premiums a year.

At the same time, its sister company -- Mid-Century Insurance which covers higher-risk drivers -- reported it made a profit of $1.8 million in 1996 on its Nevada business and is asking to lower rates an average of 3.1 percent. Mid-Century insures 25,083 vehicles in Nevada and its rates would drop by $851,000 a year.

The companies, in their applications to state Insurance Commissioner Alice Molasky, want the rate changes to be effective April 1. Molasky will examine the cases and then decide whether public hearings should be held.

Farmers Insurance received a 12-percent rate increase and Mid-Century got an 8 percent hike, both in September 1996.

Farmers says those who will be hit hardest are Southern Nye County drivers who are 16-19-year-old females or those older than age 75 who own 1985 or older cars. Their rates could jump 20-25 percent. The highest increases -- 20 percent -- for Mid-Century policy holders will be those aged 16-19 who live in Southern Nye County or at Lake Tahoe.

The company in its rate filing intends to raise the towing surcharge from 50 percent to 100 percent for vehicles 11 years old and older. And it intends to reduce the discount for non-smoking drivers from 2 percent to 1 percent.

While the statewide average for Farmers Insurance is a 1.9 percent increase, it's far higher in Clark County on rates for bodily injury and property damage coverage, which is required by state law, and on comprehensive and on collision coverage.

Motorists in Clark County are divided into four territories based on zip codes for rating purposes (see graphic). They are: Las Vegas Inner, Las Vegas Middle, Balance of Clark County and Las Vegas Outer.

For instance, in Las Vegas Inner, Farmer Insurance rates for bodily injury-property damage would rise 4.7 percent; 4 percent for uninsured motorist; 13 percent for comprehensive; 18.3 percent for collision; and 6.1 percent for medical.

Las Vegas Middle drivers would be hit with a 6 percent increase in bodily injury-property damage; 5 percent uninsured motorist; 9.7 percent comprehensive; 15.2 percent collision; and 6.1 percent medical.

Rates in Las Vegas Outer are proposed to rise 0.5 percent for bodily injury-property damage; stay the same for uninsured motorist; 3.5 percent in comprehensive; 7.5 percent in collision; and decrease 1 percent for medical.

The balance of county includes all the other remaining zip codes. Its rates for Farmers would rise 8.1 percent for bodily injury-property damage; stay the same for uninsured motorist; 7 percent for comprehensive; 15.2 percent for collision; and drop by 6.6 percent for medical.

Mid-Century rates for the inner area would drop by 0.8 percent for bodily injury-property damage; increase 5.3 percent for uninsured motorist; rise 6.4 percent for comprehensive; 15.6 percent for collision; and 5.5 percent for medical.

In the middle section, the Mid-Century rates for bodily injury-property damage would rise by 0.5 percent; drop 4.5 percent for uninsured motorist; rise 3.1 percent for comprehensive; increase 12.6 percent for collision; and 5.5 percent for medical.

In the outer areas, there would be a 4.8 percent decrease in bodily injury-property damage; a 9.1 percent rise in uninsured motorist; a 2.7 percent decrease in comprehensive; a 5.1 percent increase in collision; and a 1.6 percent decrease in medical.

In the balance of county, or all other areas, the bodily injury-property damage rate would rise 2.4 percent; drop 9 percent for uninsured motorist; increase 0.6 percent for comprehensive; rise by 12.5 percent for collision; and drop 7.1 percent for medical.