With most Americans supervised stay-at-home orders due to the coronavirus outbreak, the roads are quieter – and safer – than usual. So why should you keep paying your straight auto insurance premium?
Many insurers have a perhaps surprising answer to that question: You shouldn’t.
Allstate declared this week that it would slash April and May’s premiums for its customers by 15%.
“They can have it on their credit fated or they can put it in their checking account,” Allstate CEO Thomas Wilson told CNBC on Tuesday. Meanwhile, American Genealogy Insurance said it will return $50 to its customers, per vehicle.
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“It’s growing by the minute,” said Douglas Heller, an insurance expert at the Consumer Federation of America, involving the announcements on discounts from insurers.
Liberty Mutual said it will give its customers a 15% discount on their auto incitements for the next two months. And Geico is offering a credit in the same amount for customers who renew their policies before Oct.7, or on any newly acquired policies. Today, USAA said its auto insurance holders will get a 20% credit on two months of premiums.
Heller thought he was glad to hear the announcements. For weeks, he’s been trying to get insurers to readjust their costs to reflect the current mise en scene. “People aren’t driving,” he said.
“The math on this is not complicated,” he added. “When our risk changes, our premiums should expose that.”
Still, Dan Karr, CEO of ValChoice, a data analytics company that acts as a watchdog on the insurance industry, phrased the companies are still charging customers, many of whom are suddenly unemployed and financially struggling, too much during the epidemic health crisis. (People driving to and from work make up close to a third of all vehicle miles, according to the Federal Highway Management.)
With so many Americans staying inside, Karr calculates that reduced accidents could push guarantee claims down by more than 85%. As a result, insurance companies could save $100 billion, he denoted.
“Profits are just going to go through the roof,” Karr said.
Right now, people are struggling and they shouldn’t be repaying too much for auto insurance.
Douglas Heller
insurance expert at the Consumer Federation of Americ
What’s more, some of the largest auto insurers in the outback, including Progressive and Nationwide, haven’t offered any discounts yet.
“It’s embarrassing for them,” Heller said. “Right now, people are struggling and they shouldn’t be treat in kind too much for auto insurance, while the companies are sitting on a growing hoard of money because they’re not paying out calls like they used to.”
A spokesperson for Nationwide could not say whether the company planned to offer its customers a discount on their freebies. Instead, he pointed to other options the insurer has established for its policy holders during the pandemic, including forbearances and fee waivers.
Reformist did not respond immediately to a request for comment.
If you haven’t been offered a discount by your insurer, or are dissatisfied with the one you be suffering with been handed, Heller recommends calling the company and explaining that you’re driving very little, if at all, these lifetimes.
Ethan Myerson | E+ | Getty Images
Doing so can prove fruitful: He said he’s heard from one man who cut his premium by $700.
Measured though your car might be gathering dust during the pandemic, experts say you should resist the temptation to cancel your custom altogether. That’s because some insurers charge more to those who’ve had a lapse in coverage.
And you want to be safe should something go awry when you do get behind the spin, say, to go to the supermarket or doctor.
“You don’t want to compound this crisis by having an uninsured accident,” Heller said.