Car Insurance Companies Set to Refund Money to Customers
With much of the nation under stay-at-home orders, there’s less traffic on the roads. As a result, we’ve seen fewer auto accidents — and fewer insurance claims. Given that many Americans are facing financial challenges in these uncertain times, the nation’s top auto insurance providers are passing along some savings to their customers. Here’s a look at which companies intend to pay out, and what watchdog groups think of these programs.
The nation’s top 10 auto insurers have announced their intentions to return $7.5 billion to customers in the near future. These companies, which control 72 percent of the market, include State Farm, Geico, Progressive, Allstate, USAA, Liberty Mutual, Farmers, Nationwide, Travelers, and American Family. Allstate, the nation’s fourth-largest insurer, was the first to announce its program.
As for how much you’ll get back, expect between 15-25 percent of your usual premium. Each company has a varying timeline for its refund program. Geico plans to give its customers a refund for six months, while Farmers is only letting its refunds last a single month.
Furthermore, many of these insurance companies are letting their customers defer payments. They’ve also declared a moratorium on canceling policies due to nonpayment.
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Is it enough?
While these numbers may sound sizable, consumer advocates and watchdog groups are putting things into perspective. According to them, these rebates and dividends are just a drop in the bucket. According to figures from the Insurance Information Institute, the big 10 insurance companies collect $178 billion in premiums per year.
Dan Karr, the CEO of ValChoice, an insurance watchdog, praised the industry for developing and deploying these refund programs. However, he further commented, “All of these discounts, rebates, and credits are still dimes on the dollar compared to how much profit COVID-19 is likely to deliver to auto insurance companies.“
Will you be among the drivers who will receive a rebate, refund or dividend? How do you feel about these programs? Let us know in the comments below!