Auto insurance firms are returning some $800 million in premiums back to drivers because no one is driving amid the
CCP virus pandemic.
Allstate and American Family Insurance said they would dole out the refunds over the coming months.
“Given an unprecedented decline in driving, customers will receive a shelter-in-place payback of more than $600 million over the next two months,” Allstate chief executive officer Tom Wilson stated. “This is fair because less driving means fewer accidents,”
according to the Dallas News.
American Family said its payments would go back to its customers, worth about $200 million, according to the paper.
“We started with one week of data and we sat down and said, ‘OK, what do we do about this?’ It’s one week of data. We don’t normally price on one week of data,” Wilson also said Monday. “In about a week and half, we pulled this off. There was not one debate in our company about whether we should do this or not.”
The reason why people are driving less is that numerous states have enacted stay-at-home orders and shut down businesses deemed nonessential amid the
Chinese Communist Party (CCP) virus spread.
Other car insurance firms, including State Farm, have not returned premium money back to customers. But it is “closely monitoring our automobile insurance losses and are considering how best to take this into account and return value to our auto insurance policyholders,” the firm said, reported
CNN.
Another insurance giant, Progressive, added that it is “exploring how to best return some premium to customers to reflect the decreased exposure that comes with less frequent driving during the pandemic and expect to have those plans in place soon.”
And Geico, which is owned by Berkshire Hathaway, has not issued a public comment.
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