Allstate announced Monday that it will return $600 million in auto insurance premiums to customers because fewer motorists are on the road as a result of the new coronavirus.
The insurer will offer a “shelter-in-place payback” to its Allstate, Esurance and Encompass customers. Most policyholders will receive 15% of their monthly premium in April and May.
State Farm is also considering a rebate plan.
“We are closely monitoring our automobile insurance loss and are considering how best to take this into account and return value to our auto insurance policyholders,” State Farm spokeswoman Gina Morss-Fischer said in an emailed statement. “We expect a decision in this regard by the end of the week.”
Most states now have some type of shelter-at-home order to quell the spread of COVID-19, the disease caused by the new coronavirus. Most Americans are staying home and restaurants, schools, nail salons and other nonessential businesses are closed.
“We have access to data from over 23 million cars, and we can see the drop in driving by day,” Allstate CEO Tom Wilson said on a call with reporters Monday. “In most states, driving mileage is down 35 to 50%. And this has happened even in states that don’t have shelter-in-place restrictions.”
Allstate uses data from Arity, its mobility data and analytics arm, which tracks 23 million drivers, including Allstate customers with car tracking devices and other drivers using certain driving-related apps.
Allstate customers will receive the rebate through a credit to their bank account, credit card or on their Allstate account. The company is encouraging customers to use the Allstate Mobile app to receive the money.
In addition, the company is offering payment relief plans to customers experiencing hardships associated with the coronavirus pandemic. Allstate is making its identity protection product free to all individuals, including noncustomers, through the end of the year.
Separately, American Family Insurance said it will return about $200 million to its auto insurance customers.
“American Family Insurance is doing this out of responsibility to our customers. They are driving less and experiencing fewer claims. Because of these results, they deserve premium relief,” American Family Chief Operating Officer Telisa Yancy said in a news release.
The Madison-based insurer will return $50 for each vehicle insured. American Family is issuing checks to Wisconsin customers starting this week. The company has pending approvals in other states and said it will make payments to customers in coming weeks.
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