American Family Insurance and Allstate, two prominent auto insurance companies, have recently announced their intention to refund nearly $800 million in premiums. This decision has been taken owing to the rising stay-at-home advisories across the nation, which have resulted in fewer vehicles on the road.
Allstate is planning to return $600 million, while American Family Insurance will refund over $200 million. Allstate’s customers will receive 15% refunds of their regular premium payments in April and May. The refund decision is also a result of consumer-advocacy groups’ insistence that insurance regulators provide customer relief.
Tom Wilson, CEO of Allstate has reportedly stated that the stay-at-home directives by regulatory authorities, in order to curb the spread of the COVID-19 pandemic, have led to an unprecedented decline in on-road drivers. He further added that considering lower risk of accidents due to less driving, offering refunds to customers is fair play.
Customers of Allstate can receive refunds on credit cards, as bill credits or directly in their bank accounts. Customers of Encompass and Esurance, Allstate’s subsidiaries, are also eligible for this refund program. Additionally, Allstate has committed to providing customers with free identity protection for the remainder of 2020.
American Family customers, meanwhile, will receive $50 for each insured vehicle. Typical households will receive $100. According to the company, over 2.3 million checks will be mailed over the next couple of months. However, only customers with existing policies, as of March 11, will be eligible for rebates.
American Family COO Telisa Yancy has reportedly commented that there has been a considerable decline in customers filing car accident claims in recent weeks, which has necessitated these rebates.
American Family CEO Jack Salzwedel also stated that it is the duty of the company to repay customer premiums in the present situation, where driving activities have reduced dramatically.
The decisions taken by these two companies have drawn praise from several advocacy groups in the US, including the Consumer Federation of America, which has been consistently calling for rebates on auto premiums.