Both Allstate Insurance and American Family announced programs to return a portion of paid insurance premiums back to customers given dramatic declines in driving and accidents in as a result of shelter-in-place orders from states around the country.
As CollisionWeek reported on April 3, weekly fuel consumption declined substantially in the second half of March as stay-at-home orders took effect and people cut their driving. Collision repairers have also reported declines in sales as a result of the coronavirus crisis.
Allstate (NYSE: ALL) is providing a Shelter-in-Place Payback to help its personal auto insurance customers and is also offering free identity protection to all Americans.
“Allstate has been helping customers overcome catastrophes for 89 years since our purpose is to make sure they are in Good Hands. We have learned to move quickly and put people first,” said Tom Wilson, Chair, President and Chief Executive Officer. “This crisis is pervasive. Given an unprecedented decline in driving, customers will receive a Shelter-in-Place Payback of more than $600 million over the next two months. This is fair because less driving means fewer accidents. We are also providing free identity protection for the rest of the year to all U.S residents who sign up, since our lives have become more digital.”
Allstate, Esurance and Encompass personal auto insurance customers will receive a Shelter-in-Place Payback. Most customers will receive 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. The fastest way for customers to receive this payback is to utilize the Allstate Mobile app. Allstate is working with state insurance regulators to move forward expeditiously.
Allstate is making the Allstate Identity Protection product free for the rest of the year with no opt-out-requirement. Allstate Identity Protection helps protect people from identity theft and financial fraud and provides more control over information shared digitally. U.S. residents can get the free identity protection product through Dec. 31, 2020, regardless of whether they are already Allstate customers, by signing up in April or May.
Allstate customers experiencing financial challenges can call Allstate to learn how to delay payments without penalty. The Special Payment Plan gives auto and homeowners insurance customers the choice to delay two consecutive premium payments. Customers also can choose to pay what they can afford.
Allstate is also expanding insurance coverage for customers who use their personal vehicles to deliver food, medicine and other goods for commercial purposes. Standard personal auto insurance policies typically exclude this coverage. Many people have started delivering goods to help others, earn money and to support businesses and social service organizations that have expanded their delivery services. Allstate is ensuring our customers have protection in the coming months.
American Family Insurance will return approximately $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,” said Telisa Yancy, American Family chief operating officer.
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 printing and distribution of all 2.3 million checks within 60 days, while diligently applying social distancing practices.
“Our customers are at the center of everything we do,” said Yancy. “We are financially strong, and in a position to provide these payments to our customers at a time when it makes a meaningful difference.”
Checks will be mailed to customers in Wisconsin, where American Family Insurance is based, beginning this week, following recent approval from the state Office of Commissioner of Insurance. Payments to customers in the company’s additional 18 operating states will follow, pending approval from their insurance regulators.
Relief payments will be based on personal auto policies in force as of March 11, 2020, the date the World Health Organization declared COVID-19 a pandemic. Business written after that date is excluded.