Personal Finance News
Select Auto Insurers are Crediting Customers Due to COVID-19 Impacts
With most Americans currently under a state or local shelter-in-place order, a majority of individuals are driving far less than they normally would. On top of that, with non-essential businesses being forced to close in several states, unemployment and other financial hardships are on the rise. Therefore, in a bid to offer some assistance and perhaps earn a bit of goodwill from their customers, this week some auto insurers announced that they’d be offering unique benefits, such as discounts or refunds, for policies that are largely going unused at this time.
As CNN reports, earlier this week, Allstate and American Family Insurance both announced plans to proactively partially refund their customers on their policy premiums. Then, on Tuesday, Geico and Liberty Mutual announced similar plans. While the intent and logic among these insurers are the same, there are some notable differences in how they will go about offering these benefits to policyholders.
For their part, Allstate says it will be issuing refunds of about 15% of policy payments made in April and May — which the company says will amount to around $600 million. Allstate’s CEO Tom Wilson explained the decision in a statement, saying, “Given an unprecedented decline in driving, customers will receive a Shelter-in-Place Payback. This is fair because less driving means fewer accidents.” Notably Allstate says that this Payback will be offered to all customers regardless of whether or not their area is actually under a current or future order.
Meanwhile American Family Insurance says it will be refunding customers in the amount of about $50 per vehicle insured, which they will receive as a one-time payment. Geico, which is owned by investment icon Warren Buffett’s Berkshire Hathaway company, also plans to offer some relief to customers during this time. In an email sent to policyholders, they noted that a 15% credit will be applied to policy renewals set to occur between now and October 7th of this year as part of a program they’re calling The GEICO Giveback. According to Geico’s President and CEO Todd Combs, these discounts are expected to deliver a $2.5 billion benefit to customers. Elsewhere, Liberty Mutual and Safeco also announced 15% refunds on premiums for two months.
Beyond the discounts and refunds, many insurers have also promised to temporarily halt policy cancellations for non-payment and work with customers who may need to make special payment arrangements. This of course comes as Americans are being laid off in record numbers. In fact, following a week that saw 3.2 million people filing for unemployment benefits, a staggering 6.6 million filed last week.
While insurance companies might not have the best reputations on the whole, in this case it seems they do deserve credit for being proactive and offering assistance that few might have assumed they would. It’s also interesting to see how each company has offered a similar yet unique twist on these benefits. With Allstate and American Family Insurance leading the way and many others already jumping on board, it would behoove drivers to keep an eye on their inboxes to see if their current auto issuers will also be following suit.
