The coronavirus pandemic has triggered a series of worldwide events, one of which includes mandatory stay-at-home orders to assist in preventing the spread of the virus. This has left many Americans in a sedentary position, either forced to work from home or unemployed. In addition, most activities that involve socialization have come to a screeching halt. This has led to much less roadway traffic as individuals are no longer driving to work or attending activities, functions, and sporting events.
In response, many auto insurance companies have decided to provide financial concessions such as refunds and discounts to their customers in order to compensate for the natural decrease in car accident claims during this period of time.
Who is receiving money and when?
According to the Consumer Federation of America (CFA), insurers that are responsible for selling more than 82% of auto insurance policies in the nation will be delivering credits or refunds to customers over the next several weeks. According to the Insurance Information Institute, an estimated $10.5 billion in the form of refunds, dividends, credits, and discounts will be sent to customers during the COVID-19 outbreak.
As a customer, regardless of whether you as receive a one-time payment, credit, or refund, in the majority of cases no action is required on your part. The financial relief will be credited to your account automatically. In many cases, customers have been and will be receiving this relief sometime between April and July.
How little are the insurers really paying back?
Although $10.6 billion sounds like a sizable amount of financial relief, watchdog groups and consumer advocates are questioning the level of generosity being offered by these insurers. According to these groups, the dividends and rebates offered are an exceptionally small piece of the pie. For example, according to the Insurance Information Institute, the top 10 insurers in the nation bring in approximately $178 billion per year in premiums.
According to some of these groups, the insurance companies easily able to do much more and should do more. They explain that the insurance industry is saving tens of billions of dollars during COVID-19, with a drastic reduction in insurance claims, but with insurers continuing to pay policy premiums.
According to Dan Karr, CEO of ValChoice, an insurance industry watchdog data analytics company, the credits offered by the insurance industry at this time are a good thing. But, as Karr explains, “All of these discounts, rebates and credits are still dimes on the dollar compared to how much profit COVID-19 is likely to deliver to auto insurance companies.”
Data for auto claims issued during the weeks since the start of the pandemic is not yet available. However, based on historical trends involving the correlation between traffic and accidents, the dollar amount being credited to policyholders is likely only a fraction of what insurance companies will ultimately save from a significant decrease in claims, according to Karr.
If you have sustained injuries in a car crash in which another party bears some or all of the fault, the Sevierville car accident attorneys at Delius & McKenzie, PLLC are here to help. We can fight on your behalf for the financial recovery you deserve for your injuries and losses, helping you secure compensation to cover medical bills, lost wages, and more. To arrange a free consultation, call us today at 865.428.8780 or drop us a message through our contact form. We offer our services to individuals and families in Sevierville, Seymour, Gatlinburg, Pigeon Forge, and the surrounding areas in Tennessee.
Attorney Bryan E. Delius was born and raised in Sevier County, TN. He founded Delius & McKenzie more than 20 years ago, after receiving his JD from the University of Tennessee at Knoxville. He is admitted in Tennessee and in several federal court systems. Learn more about Bryan E. Delius.
