It has been widely reported this week that two major automobile insurance carriers, Allstate and American Family, are voluntarily issuing insurance premium refunds to customers that have drastically cut back on driving due to coronavirus and COVID-19 stay-at-home orders. Other insurance carriers are likely to follow in the coming days and weeks.
Ron Lieber wrote a great article in the New York Times on April 6, 2020, detailing his investigation as to why insurance carriers are taking this action:
The reason for the refunds is that less driving = less collisions = less claims being paid = more profit for insurance companies. Most states, like Washington, carefully regulate insurance companies and the rates they can charge. The New York Times article quotes Doug Heller, an insurance expert with the Consumer of Federation of America:
“They’re collecting all this premium and aren’t seeing accidents or claims, so they have a choice,” Mr. Heller said. “They either start giving back money or have to explain their coronavirus windfall at some point.”
So should you ask your insurance carrier for a partial refund of premiums if you are not driving much due to stay-at-home orders due to COVID-19? The answer is yes. Call your agent or call the toll free number on your proof of insurance card. Let them know your driving is curtailed and give them dates (in Washington, our stay-at-home order started March 16, and currently expires May 5). But don’t just use those dates if you are not sure when you will be able to get back to work, and ask for more if you have been laid off work.
USA Today reported on April 7, 2020 that Geico Insurance will issue premium refunds for six months. They quoted a Geico representative:
“This ongoing crisis has widespread effects that will linger,” said Geico president and CEO Todd Combs in a statement. “That is why we wanted to give this credit for at least six months.” Geico will also halt cancellation of coverage because of non-payments.
Read the full USA Today story here:
If you are a Washington resident, please remember we have a very good Insurance Commissioner that makes sure all insurance carriers follow the law, and that they put insurance consumers rights as a priority. Visit the Washington Insurance Commissioner’s special coronavirus page to understand your rights before you call or email you insurance company:
If you have an open personal injury claim from an automobile collision, now is a great time to make sure your right to recovery is protected. All of our attorneys are working remote, and our firm is open. Email any of our attorneys from their profile pages, or call us at 800.273.5005. We are here to help our communities throughout the Pacific Northwest right now.
Stay safe, stay home, and be kind!