Covid-19 Auto Insurance Policy Relief
Besides Amazon and Costco, not many companies are flourishing during the Covid-19 crisis. One industry that remains strong, however, is the auto insurance industry. If you are a worker in one of the essential industries, you probably enjoy the limited traffic these days. Along with the decrease in traffic comes a huge profit for the insurance companies. This article will explore ways to make sure you stay “ahead of the curve,” with regards to auto-insurance, during the Covid-19 crisis.
How exactly are the auto insurance companies benefitting?
According to Quartz magazine, “In the average week in San Francisco, California, since the start of 2019, there are typically about 260 calls made to 911 about traffic collisions. For the week of March 17-23, there were just 110.” This was the same in many cities across America, Los Angeles included. That is the lowest number of collisions over a 7-day period in the last 17 years. As the shelter-in-place continues in California, the number of collisions remains at an all-time low. A decrease in claims means that insurance companies are still taking in the same premium payments every month but not paying out on collision claims. This creates an enormous windfall for the insurance companies. One that may reoccur every month, considering that social distancing could last an extended period of time. In a letter written to the Insurance Commissioners last month by the Consumer Federation of America and the Center for Economic Justice, the two nonprofits point out some very alarming facts. The decrease in traffic nets roughly $50.00 per month extra, per policy. With over 268 million auto insurance policies in America, insurance companies could be receiving over $2,000,000.00 dollars per month in extra revenue.
What should the auto insurance companies do?
In California, Insurance Commissioner Ricardo Lara has recently given orders to the insurance companies. “With Californians driving fewer miles and many businesses closed due to the COVID-19 emergency, consumers need relief from premiums that no longer reflect their present-day risk of accident or loss,” said Commissioner Lara. “Today’s mandatory action will put money back in people’s pockets when they need it most.” So far, nine auto insurers have announced some form of rebates. We recommend speaking with your insurance company directly for the details of their rebates, as they will surely include a lot of fine print. Here is a short version of what they are offering:
- Allstate: 15% of auto insurance premiums for April and May.
- Farmers: 25% discount on April auto insurance premiums.
- Geico: 15% discount on auto insurance premiums.
- The Hartford 15% discount on two months’ worth of premiums.
- Liberty Mutual: 15% refund on two months’ worth of premiums.
- Progressive: 20% credit on premiums paid in April and May.
- Nationwide: One-time $50 refund for each policy with Nationwide.
- State Farm: 25% automatic rebate on premiums.
- USAA: 20% rebate on two months of premiums.
At Razavi Law Group we don’t think these rebates are enough. We firmly believe that the insurance companies are realizing far more profit, due to the Corona Virus, than they have agreed to return. We think the financial windfall unjustly received by the insurance companies should benefit those that are involved in accidents as well. Unlike other economic times when many policies lapse, people are not canceling their policies. There are simply fewer cars and fewer accidents. Therefore, in fairness, insurance companies should be paying out larger settlements right now as well. That is a great way to get premium money back to the people during this pandemic. We will fight tooth and nail with every insurance adjuster assigned to our cases during the Covid-19 pandemic. We zealously represent our clients in every matter, but we intend to fight especially hard during these times. While we can’t make the Coronavirus disappear, it makes us feel great getting insurance money back in our client’s pockets, where it belongs. What should I do?
- Call your insurance company and see if they are offering any policy relief beyond what may be automatically applied. Explain that you no longer drive as you did before, and any other important facts related to Covid-19. Remember that insurance rarely hands anything out. Ask questions. Educate yourself. Seek relief!