Auto Insurers Offering $8-$10B in Discounts in Coronavirus Relief Effort; Updated List
The group of property/casualty insurers offering auto insurance premium discounts to recognize that insureds are driving less during the coronavirus crisis continues to grow, and now includes all major auto insurers.
State Farm and Nationwide late last week joined the ranks of the top 10 auto insurers providing relief that already included Geico, Progressive, Allstate, USAA, Liberty Mutual, Farmers, Travelers and American Family.
In addition, dozens of other insurers have also announced offers including Erie, Hanover, Chubb, Cincinnati Financial, Mercury and Amica. A complete list is below.
Most discounts are for personal lines auto customers, however a number of carriers are also targeting business customers.
According to the Insurance Information Institute, these and other auto insurers have announced refunds, discounts, dividends and credits totaling $8.1 billion.
III estimates that this total will reach $10.5 billion as more auto insurers announce their offers.
“These are challenging financial times for millions of Americans, and the country’s auto insurers are making it easier for their customers to get through this extraordinary time in U.S. history,” said Sean Kevelighan, CEO, III.
He said insurers cited reduced policyholder mileage and the receipt of fewer claims amid the COVID-19 crisis as the reasons they are able to offer these breaks.
The shutdown of workplaces and gathering spots around the country to slow the spread of coronavirus is expected to lead to a sharp reduction in auto insurance claims.
Allstate has said its own telematics data shows that people are driving between 35% and 50% fewer miles in most states.
Consumer Groups
Last month, two consumer groups — the Consumer Federation of America and the Center for Economic Justice — asked state insurance regulators to weigh “premium offset payments” to consumers to reflect the expected reduction in claims.
“The likelihood of a motor vehicle accident drops radically when the number of cars on the road drops radically,” said J. Robert Hunter, director of insurance for the Consumer Federation.
Consumers who paid auto insurance premiums based on driving an estimated 1,000 miles a month but who are now driving 200 miles a month because they work at home or their business has closed should get relief from their auto insurers, Hunter said.
The consumer groups asked regulators to direct auto insurers to offer premium relief to individual policyholders who could show that their total miles driven has been lessened because of coronavirus safety measures. They did not ask for the states to order any particular relief or dollar amount.
Since then, beginning with Allstate on April 6, major auto insurers have voluntarily come forward to offer discounts to all drivers without the drivers needing to ask for the relief. While insurers are recommending the amounts, most of the proposed reductions require state regulatory approvals.
California has ordered insurers to return insurance premiums to consumers and businesses. Insurance Commissioner Ricardo Lara’s order covers premiums paid for at least the months of March and April — and May if “shelter in place” restrictions continue — in six different insurance lines: private passenger automobile, commercial automobile, workers’ compensation, commercial multi-peril, commercial liability, medical malpractice, and any other insurance line “where the risk of loss has fallen substantially as a result of the COVID-19 pandemic.”
In addition to offering discounts, many carriers are also relaxing payment terms, and some are adding free coverages for identity theft, delivery services and other needs.
A number of commercial lines carriers are also offering premium relief or other accommodations for their insureds. Others have come up with special deals for health care workers and first responders.
In other actions, Chubb Insurance vowed to keep all of its employees worldwide on the payroll, while Travelers offered to advance commission payments to its agents to help them ride out the downturn in business.
Many insurers have donated to nonprofits and charities that are serving people in need in this crisis.
Meanwhile, commercial insurers face lawsuits and calls to make payments under business interruption policies; however, they argue that most policies do not provide coverage.
Insurer Actions
The following is an alphabetical listing of insurers and a summary of their discounts and other offerings to date:
Allstate said all Allstate, Esurance and Encompass personal auto insurance customers will receive a 15% of their monthly premium in April and May, totaling more than $600 million. Customers will receive the money back through a credit to their bank account, credit card or Allstate account. Allstate is also offering free identity protection to all Americans through the end of the year even if they are not Allstate customers. Auto and homeowners insurance customers may choose to delay two consecutive premium payments. Customers also can choose to pay what they can afford. The insurer is also expanding insurance coverage for customers who use their personal vehicles to deliver food, medicine and other goods for commercial purposes.
American Family will return approximately $200 million to its auto insurance customers in the form of a one-time full payment of $50 per vehicle covered by an American Family personal auto policy. The typical American Family household with auto coverage has two vehicles, meaning the average relief check will be $100. Relief payments will be based on personal auto policies in force as of March 11. Business written after that date is excluded. American Family is also offering flexibility in several areas including payment deferral, payment plans, the removal of late fees, and suspending underwriting and non-renewal cancellations. The company has also extended private passenger automobile coverage to food delivery drivers hired by restaurants.
Amica is giving a 20% credit on customers’ auto premiums for April and May.
Arbella Insurance Group will provide its private passenger auto customers with a 20% discount on their auto premiums for three months, April, May and June 2020. The savings would result in an estimated average of $60 per vehicle, and customers with multiple vehicles on their policy could see more savings. The insurer Arbella will not cancel any policies for non-payment from April 1 to June 1, 2020 and will not charge fees for late payments or insufficient funds.
Auto-Owners Insurance will be providing a 15% premium refund to its personal automobile policyholders for the months of April and May.
Chubb is providing its personal auto insurance clients in the U.S. upon renewal with a credit reflecting a 35% premium reduction for the months of April and May, with additional discounts for subsequent months, “as the situation warrants.” The average credit is expected to be $110 per vehicle. Also, Chubb’s U.S. small business clients whose policies renew between April 1 and August 1, 2020 will receive an automatic 25% reduction in the sales and payroll exposures used to calculate their premium as well as a 15% reduction in premiums for their commercial auto insurance.
Cincinnati Financial announced that personal lines auto policyholders of Cincinnati Insurance and Cincinnati Casualty will receive a 15% credit per policy on their April and May premiums. It will also give credits on commercial policies for vehicles not being used when requested. In addition, the insurer is pausing cancellations for personal lines and commercial lines policyholders due to nonpayment of premium and waiving late fees until at least April 30; waiving restrictions on delivery services; providing additional risk management advice to businesses manufacturing of personal protective equipment and waiving vacancy clauses for buildings temporarily closed due to the pandemic.
CSAA Insurance Group, an AAA insurer, is providing a 20% premium refunds or credits– totaling approximately $100 million – to auto policyholders. Members with an active policy as of April 30 will receive a 20% refund for two months of auto premiums. CSAA is pausing cancellations for home and auto policies due to non-payment through May 31 and it is extending auto insurance coverage – at no additional cost – for drivers who are using their personal vehicles to deliver food and medicine.
Encova Insurance will issue a 15% policy credit to more than 80,000 personal auto policyholders for the months of April and May. The company has also extended grace periods and suspended non-payment cancellations and is providing insured restaurant owners with delivery coverage.
Erie Insurance will file to reduce rates by $200 million total for personal and commercial auto insurance customers in 12 states and the District of Columbia. This is not for short term auto insurance rebates. If approved, premium adjustments will take effect at the time of new policy initiation or renewal, will vary by state and also be based on individually purchased policies and coverages. The insurer is promising individualized payment flexibility and adding gift card reimbursement coverage to home insurance policies. This reimburses customers for remaining balances on gift cards that can no longer be used at independently owned and operated local businesses due to business closures.
Farm Bureau Insurance of Tennessee will issue $30 million in payments to its auto policyholders based on 24% of two months auto premium paid for each vehicle covered.
Farmers Insurance will provide relief to more than 115,000 of its business insurance customers in the restaurant, office, retail and service sectors across the country through a 20 percent monthly credit on their Business Owners Policy for the next two months on their upcoming premium notices. Farmers auto reducing auto insurance premiums by 25% on Farmers branded and 21st Century branded policies. Farmers is also temporarily pausing policy cancellations due to non-payment for business customers through May 1 and allowing extra time for business insurance customers to pay for their policies.
GEICO will give back approximately $2.5 billion in the form of a 15% credit to its auto and motorcycle insurance customers as their policy comes up for renewal between April 8 and Oct 7. The credit will also apply to any new policies purchased during this period. GEICO expects credits to average about $150 per auto policy and $30 per motorcycle policy. The company estimates the benefit to its 18 million auto and 1 million motorcycle customers will be approximately $2.5 billion. GEICO is also pausing cancellations of coverage due to non-payment and policy expiration through at least April 30.
The Hanover Insurance Group is returning 15% of April and May auto premiums to its eligible personal line’s customers. This refund equates to approximately $30 million in premium. The insurers is also offering flexibility on bill payment options ; extending personal auto coverage to individuals doing deliveries at no additional charge; waiving the limit on additional living expenses to homeowners who are forced from their homes following covered losses, such as a fire; and extending the number of days it will reimburse a customer for a rental car if an insured’s vehicle is in the shop and cannot be repaired or returned.
The Hartford is giving its auto insurance customers a 15% credit on their April and May auto insurance premiums. The 15% payback will be given on two months’ worth of premium for all customers with an active auto policy as of April 1, 2020.
Kemper will provide a 15% credit to personal auto policyholders towards their April and May premiums. Kemper’s personal auto customers who have a policy in force as of April 30 will be credited 15% of their April premiums in May, and personal auto customers with a policy in force as of May 31 will be credited 15% of their May premiums in June. The two premium credits will total approximately $100 million.
Liberty Mutual is giving personal auto insurance customers a 15% refund on two months of their annual premium. This returns approximately $250 million to Liberty Mutual and Safeco personal auto insurance customers. This is in addition to flexible payment options and delivery coverage expansion for all personal auto policies in all states for losses occurring from March 16 to May 22 and reported by July 1, 2020.
Main Street America Group will return nearly $27 million in premium relief to its commercial lines and private passenger auto insureds. Commercial insureds with a business owners policy and/or a contractors policy will receive a two-month premium credit equal to 20% of policy premiums due in April and May 2020. This credit applies to policies in force as of March 31, 2020. The company estimates it will credit approximately $10.4 million in premium to customers with these policies. Commercial auto, workers’ compensation, umbrella and other commercial policies are excluded. Main Street America personal auto policyholders will receive a one-time relief payment of $50 per eligible vehicle via check. Main Street America estimates this will mean $16.5 million in relief for personal auto customers. The company is also providing temporary coverage for individuals using personal vehicles to deliver food from local restaurants.
MAPFRE Insurance will return 15% of April and May premium to its personal auto policyholders in Massachusetts, totaling $30 million. On average, most policyholders will receive a credit of approximately $40.00. A similar credit will be provided to the company’s personal auto policyholders in its other 13 states of operation for the same time period.
Mercury Insurance will be giving back 15% of monthly auto insurance premiums to personal auto customers in April and May in the 11 states in which it operates. The refunds will total about $65 million.
MetLife Auto & Home is giving personal auto customers who are paid to date a 15% credit for April and May based on their monthly premium. The company will not cancel policies due to non-payment through July 1, 2020. Many MetLife auto insurance policies already provide coverage for people using their personal vehicles for delivering medicine or food but the insurer is extending this coverage under all personal auto insurance programs at no additional charge through May 1, 2020. It is also extending its existing cyber security services through CyberScout to immediate family members of current customers through August 2020.
Nationwide is giving a one-time premium refund of $50 per policy for personal auto policies active as of March 31, 2020. The refund is equivalent to an average savings of 15 percent for two months. Nationwide has already been extending payment terms and providing coverage for personal lines policyholders conducting a delivery of food or prescriptions.
Next Insurance is cutting April premiums by 25% for its customers with general liability, professional liability and commercial auto policies. This 25% reduction applies to those who pay monthly or paid their full annual premium up front and who purchased coverage before March 1.
NJM Insurance Group that offers coverage in Connecticut, New Jersey and Pennsylvania will provide a 15% refund on the equivalent of three months of annual premium for auto policyholders. In total, NJM will return $41.7 million in relief.
North Carolina Farm Bureau Insurance will provide a 20% dividend payment to its automobile policyholders for April and May 2020.
NYCM Insurance in New York is issuing a credit to its approximately 230,000 auto policyholders. All auto policyholders as of April 30, 2020, will receive a 15% credit back from their April and May premiums.
Plymouth Rock will issue a 25% premium credit on liability and personal injury protection coverages on all existing and new auto insurance policies. It will also waive comprehensive and collision deductibles for any health care worker involved in an accident while driving to and from work, or in the line of duty. For its home insurance customers, Plymouth Rock will apply its alternative living expense coverage to any health care worker required by illness or job requirements to stay away from home. Policyholders will have the option to donate their savings to non-profit organizations.
Preferred Mutual Insurance Company has announced its Stay Home, Stay Assured Auto Program, which will provide more than 65,000 customers with a 15% credit on their April and May personal auto insurance premiums. The credit will be given to New York and Massachusetts personal auto policyholders as of April 30, 2020. The company has estimated its Stay Home, Stay Assured Auto Program will distribute $2.5 million back to its customers.
Progressive Insurance is providing approximately $1 billion to its drivers. Personal auto customers who have a policy in force as of April 30th will be credited 20% of their April premiums in May and customers with a policy in force as of May 31 will be credited 20% of their May premiums in June. Commercial lines customers with a business owner or general liability policy will get a 20% credit on April and May monthly premiums. In addition, the insurer is suspending cancellations and non-renewals on personal and commercial lines policies for non-payment through May 15; expanding coverage for personal auto customers temporarily delivering food or medicine and allowing commercial customers additional coverage options for delivery.
Safety Insurance is offering personal auto policyholders that have a policy in effect as of April 1 a 15% credit off their premium for April and May. It is also providing auto coverage for customers now using their personal vehicles for deliveries.
Selective Insurance personal and business auto insurance policies will receive a 15% premium credit for April and May. The company is also providing payment flexibility and delaying policy cancellations, and making mid-policy adjustments to business customers transitioning from brick and mortar operations to a delivery service, using their property differently, or experiencing a reduction in sales revenue.
Shelter Insurance will issue a payment to policyholders representing approximately 30% of their personal auto monthly premium for the months of April and May. It has also eased its rules on lapsed and cancelled policies.
State Farm is returning $2 billion in dividends to auto insurance customers. On average, auto customers can expect to receive a credit of about 25 percent of premium for the time period March 20 through May 31; exact percentages will vary by state.
The Travelers Companies is giving personal auto insurance customers a 15% credit on their April and May premiums. It is offering auto coverage for customers now doing deliveries. In addition, Travelers is also providing billing relief to customers and accelerating more than $100 million in commission payments to eligible agents and brokers.
Union Mutual of Vermont announced an automatic 15% credit on all personal auto policies it writes in New England and New York.
Utica National Insurance Group will provide policyholders with a 15% payback of their personal auto insurance premiums for April and May 2020. The company is also temporarily expanding coverage under customers’ personal auto policies to include delivery coverage.
USAA will be returning $520 million to its members. Every member with an auto insurance policy in effect as of March 31 will receive a 20% credit on two months of premiums in the coming weeks. It is also offering special payment arrangements and expanded auto insurance coverage for members using their personal vehicles for deliveries.
Westfield personal auto customers will receive a 15% credit of their eligible monthly auto premium for the months of April, May and June 2020. Westfield is returning more than $16 million customers. It is also providing coverage to customers with a personal auto policy with delivery coverage.
Note: Insurers Germania and Go! also announced premium refunds in Texas.