Nevada Low-Income Insurance Program OK’d by State Assembly

Low-income Nevadans struggling to make their auto insurance payments may get some relief if a bill approved Tuesday by the state Assembly makes its way into law. The bill would establish a pilot program matching up economically strapped residents with policies providing minimal coverage at low, state-set prices.

A similar low cost auto insurance program was introduced in California 10 years ago to help ensure that low-income residents would be able to get covered rather than drive uninsured. In 2009, nearly 7,500 drivers were assigned coverage through the program.

One way that costs in the Nevada program will be kept lower than average is that coverage provided by the policies will actually be lower than the state-required minimums, though it will still suffice as legally acceptable coverage.

Nevadans are required to carry a total of $40,000 in liability protection. But policies issued through the low-income insurance plan include a total of only $23,000 in liability protection.

In addition, the bill gives regulators the authority to institute a 50 cent fee on all insurance policies issued in the state in order to “defray the costs and expenses of the program.”

Enrollment in the Nevada program would be limited in ways similar to the California program.

Eligible motorists would need to have a car worth less than $20,000, have at least three consecutive years of licensed driving experience, have a relatively clean driving record and have a gross annual household income that is at or below 250 percent of the federal poverty level, .

According to the Department of Health and Human Services, 250 percent of the federal poverty level is around $27,000 for a one-person household. For each additional household member, about $9,500 is added to the threshold.

The proposal also includes geographic limitations. The bill says that enrollment in the pilot program would be limited to drivers who primarily park their cars in a county with a population of at least 400,000. That exclusion reduces the eligibility area to only three of the state’s 17 counties.

That area may get larger, though, if the pilot program proves successful.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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