More auto insureds and small businesses are getting a break on their insurance premiums to help them through the coronavirus crisis.
Auto insurer GEICO said it will give back approximately $2.5 billion in the form of a 15 percent credit to its auto and motorcycle customers as their policy comes up for renewal between April 8 and Oct 7. The credit will also apply to any new policies purchased during this period.
Farmers Insurance is giving a 20% discount to more than 115,000 of its business insurance customers. Liberty Mutual is refunding 15% of premium for two months to personal auto insurance customers.
GEICO’s average auto policy has a semi-annual premium of about $1,000 and generally covers more than one vehicle. This means GEICO expects credits to average about $150 per auto policy and $30 per motorcycle policy. The company estimates the benefit to its 18 million auto and 1 million motorcycle customers will be approximately $2.5 billion.
GEICO, the second largest auto insurer in the U.S., joins a growing list of insurers offering discounts to help customers during the coronavirus crisis, a time when insureds are driving less and there are fewer accidents.
“This ongoing crisis has widespread effects that will linger. That is why we wanted to give this credit for at least six months,” said GEICO President and CEO Todd Combs. “Our customers have been loyal, and we are committed to doing all we can to help them.”
Last month, GEICO announced it was pausing cancellations of coverage due to non-payment and policy expiration through at least April 30, 2020. Beyond that, the company has committed to offering maximum flexibility to policyholders who need special payment options as well as transitioning nearly all of its associates to work from home to continue providing the 24/7 service it is known for.
Drivers are not alone in getting some insurance premium relief.
With many small businesses struggling as a result of stay-at-home orders, Farmers Insurance announced it will provide relief to more than 115,000 of its business insurance customers. Farmers’ business customers in the restaurant, office, retail and service sectors across the country will receive a 20 percent monthly credit on their Business Owners Policy (BOP) for the next two months on their upcoming premium notices.
“We understand how challenging running a business can be, particularly in these extraordinary times, and we want our business insurance customers to know Farmers cares and we want to help,” said Sharon Fernandez, president of business insurance for Farmers.
This 20 percent monthly credit to their BOP policies is on top of other measures the insurer has already taken to help business insurance customers, including temporarily pausing policy cancellations due to non-payment, through May 1, 2020. Additionally, for all business insurance customers, Farmers is allowing extra time for business insurance customers to pay for their policies.
Current GEICO customers can expect to see the discount when they renew. The insurer said customers do not need to take any action to receive this credit.
Similarly, Farmers said restaurant, office, retail and service business insurance customers will see the credit effective on their policy automatically.
Liberty Mutual Insurance is giving personal auto insurance customers a 15% refund on two months of their annual premium. This returns approximately $250 million to Liberty Mutual and Safeco personal auto insurance customers and builds on other customer support, including flexible payment options and delivery coverage expansion for auto policies.
“Today, more than ever, we recognize the uncertainty and financial challenges our customers are facing,” said Liberty Mutual Chairman and Chief Executive Officer David Long.
Personal auto insurance customers will receive a 15% refund on two months of their annual auto premium as of April 7, 2020, pending regulatory approval. The refunds will begin in April and will be issued either by check or in the manner the customer made their most recent payment. The payments will happen automatically. Liberty Mutual has also halted late fee charges and cancellations due to non-payment for personal auto and home customers from March 23 through at least May 22, 2020.
The Boston-based insurer has also expanded all personal auto policies to cover customers who use their personal vehicles to deliver food and medicine. Standard Safeco personal auto policies typically exclude such coverage. This additional protection is in effect for all personal auto policies in all states for losses occurring from March 16 to May 22, and reported by July 1, 2020.
AmFam and Allstate
Earlier this week, American Family Insurance said it will return approximately $200 million to its auto insurance customers. The premium relief will come in the form of a one-time full payment of $50 per vehicle covered by an American Family personal auto policy. The typical American Family household with auto coverage has two vehicles, meaning the average relief check will be $100.
American Family expects to complete the distribution of all 2.3 million checks within 60 days.
Also this week, Allstate announced that its Allstate, Esurance and Encompass personal auto insurance customers will receive a premium credit of 15% of their monthly premium in April and May, totaling more than $600 million. Customers will receive the money back through a credit to their bank account, credit card or Allstate account.
Allstate said its telematics data shows that people are driving between 35% and 50% fewer miles in most states.
Digital commercial lines insurer Next Insurance is cutting April premiums by 25 percent for its customers with general liability, professional liability and commercial auto policies. The company’s founder and CEO, Guy Goldstein, said he is challenging other insurers to do the same. This 25 percent reduction applies to those who pay monthly or paid their full annual premium up front and who purchased coverage before March 1. The discount is subject to state regulatory approval. As of April 4, the company said 38 states have approved it.
State Farm and Progressive Corp. have said they are also considering steps to provide premium relief.
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