# Auto insurance companies to refund hundreds of millions of dollars to customers **URL:** \ **Category:** The Quarantine Zone\ **Tags:** covid-quarantine\ **Created:** [April 7, 2020, 5:02pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286 "2020-04-07T17:02:24Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![cochrane](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cochrane/32/10441_2.png) [@cochrane](https://boards.straightdope.com/u/cochrane)\ **Post date:** [April 7, 2020, 5:02pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/1 "2020-04-07T17:02:24Z")
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. > **[Auto insurance companies returning $800M in premiums during COVID-19](https://abcnews.go.com/Business/auto-insurance-companies-returning-800m-premiums-covid-19/story?id=70018868)** > > Two companies announced premium relief plans amid the coronavirus pandemic. A good example of companies putting their customers ahead of their bottom line. ---
**Author:** ![Carryon](https://avatars.discourse-cdn.com/v4/letter/c/9fc29f/32.png) [@Carryon](https://boards.straightdope.com/u/Carryon)\ **Post date:** [April 7, 2020, 5:39pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/2 "2020-04-07T17:39:39Z")
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. ---
**Author:** ![Colibri](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/colibri/32/1841_2.png) [@Colibri](https://boards.straightdope.com/u/Colibri)\ **Post date:** [April 7, 2020, 5:43pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/3 "2020-04-07T17:43:08Z")
> [@Carryon](#): > > 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. ---
**Author:** ![Do\_Not\_Taunt](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/do_not_taunt/32/2968_2.png) [@Do\_Not\_Taunt](https://boards.straightdope.com/u/Do_Not_Taunt)\ **Post date:** [April 7, 2020, 5:44pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/4 "2020-04-07T17:44:14Z")
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 ---
**Author:** ![McDeath\_the\_Mad](https://avatars.discourse-cdn.com/v4/letter/m/a3d4f5/32.png) [@McDeath\_the\_Mad](https://boards.straightdope.com/u/McDeath_the_Mad)\ **Post date:** [April 7, 2020, 7:13pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/5 "2020-04-07T19:13:09Z")
Hmm what are the chances of my provincial owned monopoly based car insurance company (ICBC) doing this same thing? Precisely ZERO!!! MtM ---
**Author:** ![Beckdawrek](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/beckdawrek/32/3647_2.png) [@Beckdawrek](https://boards.straightdope.com/u/Beckdawrek)\ **Post date:** [April 7, 2020, 7:26pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/6 "2020-04-07T19:26:24Z")
That gecko better send me some cash!! Grr! ---
**Author:** ![cochrane](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cochrane/32/10441_2.png) [@cochrane](https://boards.straightdope.com/u/cochrane)\ **Post date:** [April 7, 2020, 9:12pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/7 "2020-04-07T21:12:51Z")
> [@Beckdawrek](#): > > 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. ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [April 8, 2020, 5:02pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/8 "2020-04-08T17:02:10Z")
Just got a Geico email this morning: Geico will also offer a 15% discount to its current insurance customers. ---
**Author:** ![Inigo\_Montoya](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/inigo_montoya/32/124_2.png) [@Inigo\_Montoya](https://boards.straightdope.com/u/Inigo_Montoya)\ **Post date:** [April 8, 2020, 6:54pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/9 "2020-04-08T18:54:15Z")
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. ---
**Author:** ![zimaane](https://avatars.discourse-cdn.com/v4/letter/z/a3d4f5/32.png) [@zimaane](https://boards.straightdope.com/u/zimaane)\ **Post date:** [April 9, 2020, 4:43pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/10 "2020-04-09T16:43:07Z")
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: ---
**Author:** ![txtumbleweed](https://avatars.discourse-cdn.com/v4/letter/t/278dde/32.png) [@txtumbleweed](https://boards.straightdope.com/u/txtumbleweed)\ **Post date:** [April 9, 2020, 11:47pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/11 "2020-04-09T23:47:23Z")
Had an email from USAA today: > [@](#): > > We know the COVID‐19 pandemic is having a financial impact, and we’re taking action to ease the burden. Every member with an auto insurance policy in effect as of March 31, 2020, will receive a 20% credit on two months of premiums in the coming weeks. All told, we’re returning about $520 million. > > We’re able to pass on those savings because your efforts to stay home during the pandemic have meant fewer drivers on the road, which means fewer accidents and claims. 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. ---
**Author:** ![DummyGladHands](https://avatars.discourse-cdn.com/v4/letter/d/49beb7/32.png) [@DummyGladHands](https://boards.straightdope.com/u/DummyGladHands)\ **Post date:** [April 10, 2020, 12:56am UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/12 "2020-04-10T00:56:37Z")
Add Safeco ---
**Author:** ![JRDelirious](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jrdelirious/32/9531_2.png) [@JRDelirious](https://boards.straightdope.com/u/JRDelirious)\ **Post date:** [April 10, 2020, 2:37am UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/13 "2020-04-10T02:37:58Z")
Just read the email from Liberty Mutual that they are also doing the 15%x2 months giveback. ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [April 10, 2020, 3:00am UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/14 "2020-04-10T03:00:43Z")
> [@txtumbleweed](#): > > 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. I just got the same email from them. ---
**Author:** ![gotpasswords](https://avatars.discourse-cdn.com/v4/letter/g/c57346/32.png) [@gotpasswords](https://boards.straightdope.com/u/gotpasswords)\ **Post date:** [April 10, 2020, 5:38am UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/15 "2020-04-10T05:38:58Z")
It’s a flat $50 refund per auto policy that was in effect on March 31 back from Nationwide. ---
**Author:** ![gkster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gkster/32/14107_2.png) [@gkster](https://boards.straightdope.com/u/gkster)\ **Post date:** [April 14, 2020, 5:25pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/16 "2020-04-14T17:25:52Z")
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. ---
**Author:** ![blondebear](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/blondebear/32/1022_2.png) [@blondebear](https://boards.straightdope.com/u/blondebear)\ **Post date:** [April 14, 2020, 5:54pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/17 "2020-04-14T17:54:39Z")
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](https://www.sacbee.com/news/business/article241972921.html)) 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%. ---
**Author:** ![Napier](https://avatars.discourse-cdn.com/v4/letter/n/ce73a5/32.png) [@Napier](https://boards.straightdope.com/u/Napier)\ **Post date:** [July 13, 2020, 2:19pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/18 "2020-07-13T14:19:14Z")
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. ---
**Author:** ![QuickSilver](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quicksilver/32/7832_2.png) [@QuickSilver](https://boards.straightdope.com/u/QuickSilver)\ **Post date:** [July 13, 2020, 2:30pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/19 "2020-07-13T14:30:22Z")
It’s a token gesture. They are almost certainly saving much more than what they are refunding to the average customer. ---
**Author:** ![elfkin477](https://avatars.discourse-cdn.com/v4/letter/e/a9a28c/32.png) [@elfkin477](https://boards.straightdope.com/u/elfkin477)\ **Post date:** [July 13, 2020, 2:42pm UTC](https://boards.straightdope.com/t/auto-insurance-companies-to-refund-hundreds-of-millions-of-dollars-to-customers/851286/20 "2020-07-13T14:42:02Z")
> [@Napier](#): > > 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. 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.