Although not much good news is coming out of the COVID-19 crisis, car accidents have decreased dramatically since stay-at-home orders went into place. To account for this drop and help out Americans who are struggling to pay their bills, car insurance companies are giving back over $800 million to their customers.
Allstate and American Family Insurance led the charge, with a 15% refund on premiums paid in April and May from Allstate and a $50 per car refund from American Family Insurance.
In an interview with CNN, Allstate’s CEO Stated:
“Given an unprecedented decline in driving, customers will receive a Shelter-in-Place Payback. This is fair because less driving means fewer accidents."
DELAYED PAYMENTS AND EXTENDED COVERAGE
Another source of relief for policyholders is payment deferral. Both Allstate and American Family said consumers can delay their payments without a penalty if they contact the companies first.
Additionally, customers who use their personal vehicles to work during this time will be covered if they are delivering food, medicine, and/or other goods. Typically, insurance companies do not cover work-related use.
HOW MUCH MONEY DID INSURERS SAVE?
Insurance watchdogs are wary of insurance companies’ “generosity,” as data suggests that insurers are hardly sharing their savings. On average, companies like Allstate pay over $1 billion per month in auto insurance claims, but those costs likely fell by about 85% due to the drop in driving associated with coronavirus.
While some people want to see more of the 85%, others are praising insurers for their transparency and efforts to stimulate the national economy and help people through a difficult time.
After all, we purchase car insurance in the hopes that we never have to use it.
WHAT IF MY COMPANY ISN’T OFFERING A REFUND?
Before you jump to conclusions, check your insurer’s communications surrounding COVID-19. Some insurance companies are offering credits, coverage assistance, and billing leniency. Progressive, for example, will automatically apply a 20% credit to your policy in April and May. Geico and Farmers are also following Allstate’s example and taking 15% off premiums in Oklahoma, and industry leader State Farm is “considering” ways to “return value” to its customers.
If your insurance company is not offering refunds, credits, or relief, you may still be able to save. Assuming you are not driving to and from work, you can change your policy from a commuter plan to a personal use plan – just remember to adjust it again when you go back to work.
For those who are still driving, we recommend keeping your insurance coverage the way it is, and even adding uninsured motorist coverage if you do not have it already.
You never know what’s going to happen on the roadways.
HAVING ISSUES WITH YOUR INSURANCE COMPANY?
If you do get into an auto accident, your insurance company may still have to cover some of the damages. Should they refuse to do so, Richardson Richardson Boudreaux, PLLC can help.
Our firm has been handling automobile insurance disputes since 1984 and our attorneys are committed to protecting your legal rights.
Hopefully, this will be a period of positive change between insurers and policyholders, but if you run into any issues, please call us at 918-492-7674 or contact us online.
*For the most accurate and up-to-date information on the COVID-19 pandemic, please consult the Centers for Disease Control and Prevention(CDC) or the World Health Organization(WHO).