Consumer advocates are calling on insurance companies to continue partial auto-policy premium refunds that were widely instituted in the spring as the coronavirus pandemic sharply curtailed driving.
As business shutdowns, school closures and stay-at-home orders caused by the coronavirus outbreak cleared traffic from roads across the country, many of the largest U.S. auto insurers took the unusual step of returning a portion of premiums to policyholders because the companies had fewer accidents to cover.
Those relief measures generally shaved 15 to 25 percent off customers’ premium payments for one or more months during the spring and returned $14 billion to policyholders, according to the Insurance Information Institute. Several companies that initially announced the givebacks for April and May extended them to June, but now all but a handful have ended the refunds.
Here’s what some of the biggest auto insurers did.
• Allstate, the nation’s fourth largest auto insurer, refunded 15 percent of customers’ monthly premiums in April, May and June. The Northbrook, Illinois–based company said the paybacks amounted to more than $1 billion.
• American Family Insurance of Madison, Wisconsin, the ninth-largest firm, issued a onetime repayment in April of $50 for each vehicle on its automotive policies. The company has since introduced a new program, offering a 10 percent monthly credit on auto-policy payments through the end of the year.
• Farmers Insurance of Woodland Hills, California, the seventh-largest firm, reduced premiums for Farmers and 21st Century auto-policy holders by 25 percent for April and by 15 percent for May. New York customers got a onetime 40 percent refund.
• Geico, whose headquarters are in Chevy Chase, Maryland, is giving a 15 percent credit on up to six months of premiums for customers who renew or buy motor vehicle policies between April 8 and Oct. 7. The refunds will total about $2.5 billion, according to Geico, a subsidiary of holding company Berkshire Hathaway, which is considered the second-largest U.S. auto insurer.
• The Hartford, whose policies include AARP-branded auto insurance, gave customers a 15 percent refund on their personal auto premiums for April, May and June.
• Liberty Mutual, the sixth-largest auto insurer, gave auto-policy holders a 15 percent refund on two months of their annual premium. That returned about $250 million to customers of Boston-based Liberty Mutual and Safeco, which it owns.
• Nationwide, the No. 8 auto insurance carrier, with headquarters in Columbus, Ohio, provided a onetime premium refund of $50 for each personal auto policy in effect March 31. The refund is the equivalent of 15 percent of an average bill for two months, the company said.
• Progressive Insurance, whose corporate headquarters are in the Cleveland suburb of Mayfield Village, Ohio, gave a 20 percent credit on April and May premiums to customers with personal auto insurance. In New York the credits were applied in May and June. The company estimated that the givebacks will be worth about $1 billion total.