The Chubb group of insurance companies submitted a request to the Nevada Division of Insurance in July 2017 to decrease select companies’ rates by 9.2% and to introduce more discounts and features to customers for Masterpiece Auto Preference, their auto insurance product.
The filing is still pending and not approved yet, but the proposed changes would be effective for new customers and policies on March 12, 2018. These changes will affect existing policyholders on April 26, 2018, a month and a half later.
Chubb’s Proposed Rate Decrease Impact
Premiums are estimated to drop, on average, around $296 per affected policy, if approved, with 461 policyholders in Nevada in scope. The three Chubb affiliate companies identified are: the Pacific Indemnity Company, the Vigilant Insurance Company, and the Federal Insurance Company. The largest decrease on average may be seen by a handful of policyholders underwritten through the Pacific Indemnity Company, while the lowest mean decrease would be with the Federal Insurance Company. The expected premium price drop is a significant given the state's average cost for car insurance.
This table shows the changes in premiums and policies by company:
|Chubb Company||Overall Impact||Established Premium Change||Established Policies Affected||Average Premium Impact|
|Pacific Indemnity Company||-9.60%||-$15,939||35||-$455|
|Vigilant Insurance Company||-5.10%||-$98,820||302||-$327|
|Federal Insurance Company||-3.50%||-$21,721||124||-$175|
Chubb also provided estimates of the maximum and minimum percentage changes across the 461 policies. On one end, one policy is expected to see their premiums drop by 53.3%, while one policy would increase 99.0% under the submitted filing. Drivers insured with the Vigilant Insurance Company will have the broadest range of changes. The Pacific Indemnity and the Federal Insurance Companies, while they have similar ranges, are slightly less extreme. The drop in premiums will bolster Nevada's position as a state with lower than average car insurance costs when compared to the rest of the country.
Chubb’s Proposed Changes to Masterpiece Auto Preference
Rate decreases aside, the latest filing also provides a glimpse into Chubb’s attempt to make their product more competitive for families with new teenage or young drivers in Nevada. These include adding discounts such as a Good Student Discount, or even removing previous surcharges for additional drivers.
This table highlights the major types of suggested accommodations for youthful drivers as well as the max percentage discount contemplated in the Silver State. In most cases, Chubb defines youthful operators as drivers under 25 years old, with some exceptions outlined below. The company intends to apply the discounts on just the liability and collision portions of their premiums, which generally make up the largest portions of auto insurance costs.
|Discount %||Notes on the Discount|
|Good Student Discount||1%-17%||Tiered based on on age and marital status; older married drivers get smaller discounts of 1%|
|Driver Training Discount||Up to 25%|
|Tenure Discount||Up to 8%||For customers of five years or more with unmarried 16-18 year old drivers|
|Non-Principal Driver Discount||Up to 20%||Unmarried, < 25 years old, drive vehicle less than 30% of the time; can’t be combined with Away at School discount|
|Away at School Discount||Treated as Married||School is more than 100 miles away, < 25 years old|
Aside from the discounts related to children, a few other new discounts being proposed in Nevada for the Masterpiece Auto Preference product are:
- Vehicle Ownership Discount of 5% when the insured car is owned and fully paid off
- Portfolio Discount of 10% to 15% for having a homeowners insurance policy in good standing with Chubb
- Customer Loyalty Discount of 2.5% for auto customers of 5-9 years, and 5.0% for customers with over 10 years
- Anti-Lock Brake System Credit of 5% to liability and uninsured motorist premiums
Chubb will also be offering a few new optional features to their Masterpiece Auto Preference product. These are standard bells and whistles offered at other car insurance companies nationally, and will help to standardize Chubb’s offerings in Nevada.
- Road Service Coverage: labor and towing up to 200 miles away, for $18 in additional premiums
- Lease Gap Coverage: gap, early termination, physical damages coverage for leased vehicles, for $45 in extra premiums