LAS VEGAS (KTNV) — Nevada drivers are frustrated over hidden fees buried in their auto insurance policies.
Did you know that if you have people of driving age living in your household who are not listed on your auto insurance policy, you could end up paying more to exclude them from your coverage?
These hidden costs, often called "excluded driver fees," can quickly drive up premiums.
One Las Vegas driver, George West, is speaking out about what he sees as a lack of transparency from his insurance company regarding this costly charge.
"They should tell you that upfront, and they don’t!" said West, a longtime Las Vegas lawyer who was shocked when he received his six-month auto insurance bill.
West was charged close to $200 for three household members: his elderly mother, who doesn’t drive, and his two sons—one of whom has a separate insurance policy, while the other does not have a driver’s license.
"I had no problem with excluding them, but now you’re charging me for three people at $176.78," he said.
Insurance companies sometimes apply these fees to mitigate the risk of an uninsured driver getting behind the wheel. In 41 states, including Nevada, insurers are allowed to offer limited coverage for excluded drivers while also charging an additional fee.
I reached out to the Nevada Division of Insurance about George’s claim.
The DOI stated, "No such fee was ever approved or would have been approved" by their agency. They added that the "excluded driver fee" was either, "a misrepresentation made to the consumer or a misunderstanding by the consumer."
The DOI did clarify, however, that insurance companies are permitted to factor in "household composition" variables when calculating premiums. This means they can consider the number of people residing in a household, regardless of whether a driver is included or excluded from the policy.
Auto insurance analyst Divya Sangameshwar explained that add-on costs like household composition fees are common practice in the industry.
"They come in the form of processing fees, administration fees, installment fees, and even cancellation fees," Sangameshwar said.
While these fees are not illegal in Nevada, West argues that the issue lies in the lack of transparency.
"I was just flabbergasted. Who checks the five pages of terms and conditions?" he said.
Sangameshwar advises consumers to thoroughly review their auto insurance policies and shop around for better options.
"If something doesn’t look right about your auto insurance company, then call them up. And if they’re not willing to work with you, this is the best time to shop around," she added.
Sangameshwar pointed out that not all optional fees are unnecessary. In Nevada, certain optional coverages like uninsured motorists and comprehensive insurance may seem like extra costs but often provide valuable protection and save consumers money in the long run.
As for West, he says he plans to take further action.
"I’m going to do some investigation with the insurance commissioner and make a complaint," he said.
Filing a Complaint
If you’re facing issues with your insurance company, the Nevada Department of Insurance encourages consumers to first try resolving the matter directly with their insurer or agent. If that doesn’t work, you can file a formal complaint through their online portal.
