Allstate, Geico, American Family offer rebates as cars stay parked

Vallejo Times-Herald, by Michael Nowels, April 11, 2020

How long has it been since you drove your car?

For many Californians during this pandemic, the automobile has been more of an idea than a tool as stay-at-home directives keep them from driving to work or much of anywhere other than possibly the grocery store.

Some auto insurance companies have begun offering rebates due to decreased use. It began with Allstate on Monday announcing it would return $600 million in premiums to customers. Now American Family, Geico and Liberty Mutual are among the insurance companies returning money to their policy holders.

Most are offering about 15 percent in a rebate, while American Family is offering $50 back per vehicle.
Meanwhile, the California Department of Insurance is calling upon all auto insurers to do the same: “Consumers and businesses need rate relief now and we need insurers to move with all possible speed to reassess their risk profiles in light of California’s proactive shelter in place efforts,” commissioner Ricardo Lara said in a statement via email.

“I and my Department will be reviewing all insurance company actions to make sure money is returned to consumers, drivers and businesses in a manner that is not unfairly discriminatory, is transparent, and which follows the spirit of California’s strong consumer protections, including under Proposition 103,” which gives CDI the right to review all property and casualty insurance rates in the state.”

AAA California has not responded to a request for comment on the issue, while State Farm and Progressive told Reuters earlier this week they were considering options for rebates, but they haven’t yet announced any specific plans to return value to drivers. Lara also highlighted commercial auto insurance and worker’s compensation insurance as areas with lower risk during the pandemic, therefore making them candidates for consumer rebates as many face financial struggles.
He threatened to force insurers to offer rebates, saying the department would have a broader announcement in the near future.

“f the companies will not do it voluntarily, my Department will exercise its authority under California law so that drivers are not overpaying for insurance during this emergency,” Lara said. “Every dollar counts for drivers and businesses, and the Department is actively exploring how we get money back to policyholders — including the ability for policyholders and businesses to be re-rated given the significant impact that “shelter in place” directives have had on miles driven and business receipts.”