Auto insurers announced plans to give back millions of dollars to clients due to what’s been described as an “unprecedented decline in driving” due to the coronavirus.
The insurance companies, Allstate Corp. and American Family Insurance, said they will return money to their customers as a “shelter-in-place payback” due states issuing “shelter in place orders” to stop the spread of COVID-19, per Bloomberg in a piece published Monday. (RELATED: REPORT: Coachella Potentially Rescheduled To October Due To Coronavirus Fears)
We’ve been helping customers overcome unknowns for 89 years. And this year has been no exception. That’s why we’re doing more than ever to help customers in these challenging times. Find out more in the Allstate app or https://t.co/SfmQ8O5D0T. pic.twitter.com/EECxfwQSqR
— Allstate (@Allstate) April 6, 2020
“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 said in his company’s statement. “This is fair because less driving means fewer accidents.”(RELATED: Here Are The Members Of Congress Self-Quarantining After Meeting Person With Coronavirus At CPAC)
“We started with one week of data and we sat down and said, ‘OK, what do we do about this?’ he added. “It’s one week of data. We don’t normally price on one week of data. 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.”(RELATED: Here’s A List Of How Every Country In The World Is Responding To Coronavirus)
Wilson continued, while explaining that the stay at home mandates has led to a decline of about 35% to 50% in driving in most states.
Allstate personal auto customers can expect to receive 15% of their monthly premium in April and May.
According to the report:
Allstate said its first-quarter underwriting income will be cut by about $210 million before taxes because of the payback to holders of 18 million policies, with the remainder of the payback to be recognized in the second quarter. The company is also offering free identity protection for the rest of the year and payment relief for struggling customers.
And those customers with American Family Insurance will receive a one-time payment of $50 per covered vehicle with the company expecting to return about $200 million to those it auto insured clients.
— Regan Fackrell (@reganfackrell) April 6, 2020