Government-issued stimulus checks aren’t the only source of new money for taxpayers right now, at this point during the coronavirus pandemic. Car insurance providers around the US, for example, have also been offering rebates to customers. The reason? Widespread lockdowns and the shift to work-from-home meant that, naturally, people were no longer on the road as much anymore. So it didn’t seem fair to continue charging people the same amount of money according to their pre-COVID risk profile. At least, a temporary adjustment of some kind seemed to be in order.
That’s why, in the early months of the pandemic, the insurer Allstate decided to offer partial refunds to customers. Specifically, for their April and May 2020 monthly premiums. What that amounted to was a return of more than $600 million in premiums to customers — and more is coming elsewhere.
Car insurance rebate checks
Earlier this year, California’s Insurance Commissioner Ricardo Lara leaned on auto insurers to cough up even bigger refunds to customers. Now, Lara’s office is saying that some insurers still haven’t given back enough.
Lara earlier this month ordered three auto insurance companies to refund to California drivers more of the excess premiums they’ve paid since the start of the pandemic. The order targets three companies that comprise 20% of all California drivers. Those are Allstate Northbrook Indemnity Company, Mercury Insurance Company, and CSAA Insurance Exchange.
An analysis from the California Department of Insurance found that from March to September 2020, insurance company groups returned on average 9 percent of premiums. However, the Department’s analysis found that almost double that amount (17 percent) should have been returned to customers.
‘Out of patience’
“Last year as the pandemic hit, millions of Californians stayed home to save lives,” Lara said in a news release. “We drove less, lowering risks for other drivers on the road. And because of that, I ordered insurance companies to return money to drivers.
“New data shows these three insurance companies have the largest gap between what they did and what they should have done to provide further premium relief for their policyholders. On behalf of consumers, I am out of patience. These insurance companies have 30 days to tell us once and for all how they are going to make it right before we take further action.”…Read more>>