Report Card: Auto Insurers Graded On COVID Relief Measures
Thursday, April 16th, 2020 Auto CatastropheThe Consumer Federation of America (CFA) has published its own critical review of the auto insurance premium relief measures insurance companies have offered in the past few weeks in response to the COVID-19 pandemic, finding that while some insurers have been incredibly supportive, others have been slow to respond to calls for lowered premiums.
In its release, the CFA noted that as of April 13, 2020, insurers that sell over 82% of the auto insurance in the US have announced that they will refund or offer credit of more than a collective $6.5 billion to drivers over the next two months.
The payments reflect the insurers’ savings due to fewer-than-expected auto insurance claims with the significant drop in cars on the road resulting from stay-at-home orders.
CFA said that it, together with the Center for Economic Justice (CEJ), had written letters addressed to insurers and state insurance regulators last month to ensure customers received financial relief.
Both CFA and CEJ explained that the premium pay-backs are “reasonable and necessary to account for insurance rates that suddenly became excessive,” because any assumptions about miles driven or claim frequency became moot when customers were asked to stay home.
