Insurers returning billions of dollars to drivers stuck at home due to coronavirus
American auto insurers will refund drivers billions of dollars as people are stuck at home during the coronavirus pandemic, media outlets report.
Stay-at-home orders in multiple states have reduced traffic in the United States, AARP reported. Many car insurance companies are responding to the drop in traffic by refunding policy-holders a percentage of their premiums, according to USA Today.
A few of the companies offering refunds include Geico, Allstate, Liberty Mutual and American Family Insurance, according to USA Today and AARP. Company executives cited a decrease in traffic and fewer accidents when explaining their decisions, CNN reported.
“Given an unprecedented decline in driving, customers will receive a Shelter-in-Place Payback,” Tom Wilson, the CEO of Allstate said, according to CNN. “This is fair because less driving means fewer accidents.”
Allstate announced it will refund policy holders 15% of their premium, which totals about $600 million, USA Today reported. The company says customers can expect a refund in their bank accounts or on their credit cards in April and May, according to USA Today and AARP.
Geico customers also can expect a 15% return on their premiums, which is worth about $2.5 billion, USA Today reported. The company “will also halt cancellation of coverage because of non-payments,” according to USA Today.
“This ongoing crisis has widespread effects that will linger,” CEO Todd Combs said in a statement obtained by USA Today. “That is why we wanted to give this credit for at least six months.”
American Family Insurance says it will repay customers with a check for $50 in the next couple of months, according to AARP. The refunds will amount to about $200 million, CNN reported.
Drivers insured through Liberty Mutual and Safeco “will receive 15% refunds on two months of their premiums,” USA Today said. That’s worth about $250 million in returns, Liberty Mutual said in a press release obtained by USA Today.
Other insurers like Progressive, State Farm and USAA are considering offering returns to their customers, according to AARP and USA Today.
