Car Insurance Companies Set to Refund Money to Customers
No matter if you’re under official shelter-in-place orders or just practicing social distancing, you’re probably not driving as much as you usually are. You’re not alone, either, with the rate of car accidents dropping across the country. This means that car insurance companies are shelling out less to cover them, and some of the largest groups will be passing on the savings to you and your fellow customers.
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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!
Kimiko Kidd is a native Daytonian. She graduated from Wright State University with degrees in environmental science and sociology. She loves her trusty old Honda Civic, but dreams of owning a 1974 Ford Falcon XB with a custom paint job and a vintage Kawasaki Z1000. In her free time, Kimiko can be found watercolor-painting, baking muffins, collecting rocks, playing old-school Nintendo games, writing her novel, sewing stuffed animals, and cosplaying as her favorite Mad Max characters. See more articles by Kimiko.