Less driving, fewer crashes: You might get a nice refund
After 10 a.m. on a gorgeous Friday morning, Lakeside Avenue in downtown Coeur d’Alene is usually bustling with business traffic. Thanks to the coronavirus, few cars are seen. Silver lining? Less driving means refunds for many car insurance customers.
MIKE PATRICK/Press
As Idaho residents follow the governor’s stay-at-home order, fewer drivers take to the road. In turn, there have been fewer auto accidents. Several automobile insurance companies are taking note, refunding customers portions of their premium payments during the coronavirus pandemic.
“The payback is fair because less driving means fewer accidents and our purpose is to make sure that [our customers] are in good hands,” said Michelle Rico, an Allstate insurance regional spokesperson.
Policyholders who belong to the Allstate family of companies including Allstate, Esurance, Encompass, and Allstate Canada will receive 15% of their April and May premium payments returned.
“We expect policyholders to start seeing their first payback [this week],” Rico said.
In total, Allstate will send out $600 million in premium refunds to its 18 million drivers. Rico called the decline in driving unprecedented and said the company has noticed a significant drop in claims, especially in “bumper to bumper” accidents.
“We have learned that the best response at a time of crisis is to act quickly and put people first,” Rico said. “We’re taking more actions to treat our customers fairly and help people in these challenging times.”
Stephanie Nelson owns Pacific Crest Independent Insurance Alliance in Coeur d’Alene. The insurance brokerage is working with auto insurance companies to help customers arrange payment plans or delayed payments due to the pandemic.
Nelson said every day, more insurance companies update their policies on late payments or provide partial premium refunds.
“Each insurance company has to get permission from the state Department of Insurance,” Nelson said. “It takes a little time to go through that approval process. We’ll be seeing more as the days go on.”
Safeco Insurance Co. and Liberty Mutual are both giving back 15% of the auto insurance premiums paid for the policy term, according to Nelson. Travelers Auto Insurance is also offering partial refunds for April and May.
Nelson has also noticed fewer accident claims coming through her office.
Subject to approval by state regulators, Progressive will credit personal auto customers 20% of their April premiums in May and 20% of their May premiums in June. The company estimates that the sum of these two credits will total approximately $1 billion. The credits will be applied automatically to the customers’ policy and those customers who have paid in full will receive a refund of the credited amounts.
Travelers Insurance Companies have also announced a 15% credit on auto insurance policies for April and May premiums.
“Our customers are doing their part to stay at home and help stop the spread of COVID-19,” said Alan Schnitzer, chairman and chief executive officer of Travelers. “Our new program recognizes their contribution to the effort we all need to make to protect our health and safety and the resulting decrease in miles driven and auto claims.”
Nelson said insurance companies across the board are stepping up to support their customers. She encourages policy holders to reach out if they have concerns and to continue communication with their agent or broker, even if they can’t make a payment in full.