PROVIDENCE – Multiple insurance companies are issuing credits on customers’ auto insurance policies as a way of offering relief during the COVID-19 pandemic.
Amica Mutual Insurance Co. Chairman, CEO and President Robert A. DiMuccio announced April 9 that all of its auto insurance customers as of April 1 will receive a 20% credit on their auto premiums for the months of April and May, pending regulatory approval. Amica said the premium credit applies to automobile, motorcycle and recreational vehicle policies.
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Amica said the credit will be issued in two installments, one in May and the other in June. This measure, Amica said, is being done as a result of a reduction in auto claims with less drivers on the road due to the pandemic.
“These are unprecedented times, and our top priority remains keeping our customers, employees and communities healthy and safe,” DiMuccio said in a statement.
If an average annual policy is $2,400, customers will receive $80 in total credits for the two months, Amica said. The company also said the credits will be applied to an owed balance if customers have such a balance on their policies.
Allstate Insurance Co., which has locations in 30 cities and towns in Rhode Island and Bristol County, Mass., introduced its Shelter-in-Place Payback program in which auto insurance customers will receive an average payback of 15% on their premium costs for April and May. In a video message on Allstate’s website, Chairman, CEO and President Tom Wilson said customers will collectively receive more than $600 million back “to help in these challenging times.”
Esurance Insurance Services Inc., Allstate’s online insurance company, will also be part of the Shelter-in-Place Payback program. The payments will take place during April and May and the credits will be issued electronically or by check, Esurance said.
Bloomberg News reports that Allstate’s first-quarter underwriting will be cut by about $210 million before taxes due to the payback on 18 million policies.
MetLife Auto & Home Insurance Agency Inc., which has a Warwick location, announced April 10 that it will also be issuing a 15% credit on monthly premiums for April and May to customers nationwide. The company will also not cancel policies due to nonpayment through July 1.
It is unclear how much in credits will be returned to Rhode Island customers, or if additional credits will be issued if the pandemic continues. MetLife officials did not immediately respond to Providence Business News for comment on Monday.
‘In full support’
Mark A. Male, executive vice president and chief staff executive for the Rhode Island Association of Insurance Agents, the Independent Insurance Agents of Rhode Island, and the New England Association Services, told PBN Monday the local agents are in “full support” of the movement by insurance companies to give some relief to customers since the frequency of claims has “dropped dramatically.”
Elizabeth Kelleher Dwyer, deputy director and superintendent of financial services for the R.I. Department of Business Regulation’s Insurance Regulation Division, told PBN Monday that the insurance companies are amending their policies and rates that had originally been filed with the department in order to show the credits being voluntarily issued to customers. Dwyer said the department is approving those amendments because it wants to get relief to customers.
Normally, an insurance company would have to file “mathematical evidence” with RIDBR to show that what the amount of losses are predicted to be for the company and to set a proper rate, Dwyer said. However, this is not a normal period of time.
“We [have] never seen a period with this type of shutdown of an economy,” Dwyer said. “So, it’s very hard to determine what the right rate is.”
Dwyer said it would not be known for “maybe a year” as to how the pandemic will impact insurance rates.
James Bessette is the PBN special projects editor, and also covers the nonprofit and education sectors. You may reach him at Bessette@PBN.com. You may also follow him on Twitter at @James_Bessette.
