Two major car insurance companies, Allstate and American Family Insurance, will refund over $800 million in premiums to their covered drivers. Allstate will refund 15% of customers’ premiums for April and May, and American Family will refund its customers a one-time payment of $50 each, due to customers driving fewer miles because of stay-in-place orders because of Covid-19.
A good example of companies putting their customers ahead of their bottom line.
I don’t get it? Unless there is a ban on driving in some places? Is there? It’s nice of them to do that, but auto insurance doesn’t mean driving, it includes the ability to drive, whether you choose or not.
Insurance is calculated on the probability of getting into an accident and making a claim. If no one is driving and there are very few cars on the road, the risk of an accident goes down enormously.
If people are driving less, there are fewer accidents, and insurance companies have fewer payouts and a lower cost structure. That they’re opting to refund this is somewhat surprising, but there’s either a regulatory mechanism or they see a positive enough PR play.
ETA: argh, ninja’d
Hmm what are the chances of my provincial owned monopoly based car insurance company (ICBC) doing this same thing?
Precisely ZERO!!!
MtM
That gecko better send me some cash!! Grr!
The gecko regrets that he is unable to do so at this time, but he’s sent over this nice plate of biscuits.
Just got a Geico email this morning: Geico will also offer a 15% discount to its current insurance customers.
AmFam is a mutual insurance company (owned by the policyholders), so this sort of dividend is hardly unprecedented despite its rarity in the past couple decades. Mutual companies are designed to give unplanned earnings back to the policyholders. Allstate is a stock company, so what they’re doing is a little more unusual.
GEICO is now offering a 15 percent discount to six-month auto and motorcycle policies when they next come up for renewal. Which for me is at the end of September. :mad:
Had an email from USAA today:
Since USAA is a member owned company, there is a good chance we will also see a larger than usual cash distribution at the end of year, as well, if claims stay down.
Add Safeco
Just read the email from Liberty Mutual that they are also doing the 15%x2 months giveback.
I just got the same email from them.
It’s a flat $50 refund per auto policy that was in effect on March 31 back from Nationwide.
Got this email from our agent today:
State Farm Good Neighbor Relief is returning $2 billion dividend to Mutual auto insurance customers.
The average dividend (i.e., credit) will amount to about 25% of the premium the customer paid for their policy for the March 20 to May 31 period. The exact percentage of the credit will vary by state.
The California State Insurance Commissioner has ordered that insurance companies must refund a portion of customer premiums for March and April for certain policies.No specific amount/percentage was mandated, and the companies have 120 days to issue the refund. (link to Sac Bee story)
Haven’t heard from my company yet, but my renewal is up next month and I’m planning on lowering my estimated annual mileage by 20%.
Sorry for resurrecting an oldish thread, but I’m really curious about this. What’s their angle? Of course reduced driving is going to save them settlement outlays, but still, I can’t quite believe they are just being nice.
It’s a token gesture. They are almost certainly saving much more than what they are refunding to the average customer.
Part of it is to keep customers like me. I don’t have to have car insurance here in New Hampshire and there are one or two others that don’t require it, as well as several other states that allow a cash bond with the state in lieu of an insurance policy. I’ve kept my coverage but given I’m working from home for at least two more months and have only filled up once since mid-March if I had money problems (and wasn’t a worrier) cancelling would be tempting.