In the veritable sea of depressing news surrounding the COVID-19 pandemic, let’s take a step back and take a look at one piece of news that CNN Business among others are reporting. As millions of Americans sequester themselves to prevent the spread of coronavirus, naturally they aren’t driving nearly as much these days. To that end, two insurance companies — Allstate and American Family Insurance — are helping their customers out by “giving back” about $800 million to their customers.
Mind you, even if you haven’t been driving anywhere, it’s not the total refund you may imagine. For its part, Allstate will refund 15 percent of premiums its customers pay in April and May. According to reports, that sum totals around $600, as Allstate is one of the largest insurers in the U.S. “Given an unprecedented decline in driving, customers will receive a Shelter-in-Place Payback,” said CEO Tom Wilson. Branding aside, some insurance companies are at least acknowledging that drivers aren’t at nearly as high a risk of getting in accidents if they aren’t actually driving.
American Family Insurance, on the other hand, will give back $50 per vehicle that a household insures with the company. It says that rebate works out to about $200 million.
As with several other insurers, both Allstate and American Family Insurance reiterated its customers can delay payments and work out arrangements if they lose their income due to the pandemic. Both also plan to expand their coverage to customers who use their cars to help deliver food and medicine, among other goods, since that’s the only way most can get anything with stay-at-home orders in place.
Granted, 15 percent and $50 is not a huge amount, but what’s critical to watch is whether other auto insurers will follow suit. We’ll provide more updates if this becomes an industry-wide trend.