Government-issued stimulus checks are not currently the only source of new money for taxpayers, right now during the coronavirus pandemic. For example, auto insurance providers in the US also offer discounts to customers. The reason? Of course, due to widespread lockdowns and the shift to working from home, people were no longer on the road as much. So it didn’t seem fair to keep asking people the same amount according to their pre-COVID risk profile. In any case, a temporary adjustment seemed in order.
That’s why insurer Allstate decided in the early months of the pandemic to offer customers partial refunds. Specific to their April and May 2020 monthly premiums, that equated to a return of over $600 million in customer premiums — and more to come elsewhere.
Car insurance discount checks
Earlier this year, California Insurance Commissioner Ricardo Lara leaned on auto insurers to cough up even bigger refunds to customers. Now Lara’s office says some insurers still haven’t returned enough.
Earlier this month, Lara ordered three auto insurance companies to reimburse California drivers more of the excess premiums they’ve paid since the start of the pandemic. The order is aimed at three companies that make up 20% of all California drivers. Those are Allstate Northbrook Indemnity Company, Mercury Insurance Company and CSAA Insurance Exchange.
An analysis by the California Department of Insurance found that insurance companies refunded an average of 9 percent of premiums from March to September 2020. However, the ministry’s analysis found that nearly double that amount (17 percent) should have been returned to customers.
“Last year, when the pandemic hit, millions of Californians stayed at home to save lives,” Lara said in a press release. “We drove less, reducing the risks for other drivers on the road. And that’s why I’ve instructed insurance companies to give money back to drivers.
“New data shows that these three insurance companies have the biggest gap between what they did and what they should have done to save their policyholders even more premiums. On behalf of the consumers, I no longer have the 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 any further action.”
The 30 days listed in that statement began on October 5. Lara’s office has said his actions have already resulted in more than $2.4 billion in driver insurance premiums. That’s the most refunded to drivers in the US. And as the pandemic continued, Commissioner Lara extended his repayment order until June 2020 and beyond “if circumstances warrant”.
Lara continued: “We will use all means available to hold insurance companies accountable for their actions during the pandemic.”