April 8, 2020
Never before have so many vehicles in the United States been “off-road.” In recognition of customers who are not only self-isolating, but also sheltering their cars in place during the COVID-19 pandemic, auto insurers Allstate and American Family Insurance are returning some money to drivers nationwide, The Boston Globe reports.
On April 6, Allstate announced on its site, “As we all work together to slow the spread of COVID-19, more of us are at home and driving less, which means having fewer accidents. Given this decline in driving, we are announcing the Allstate Shelter-in-Place Payback of more than $600 million in April and May for our auto insurance customers.”
Allstate CEO Tom Wilson said in his company’s statement. “This is fair because less driving means fewer accidents.”
States across the country have issued stay-at-home mandates to help slow the spread of the deadly coronavirus. That’s led to a decline of about 35%t to 50% in driving in most states, Wilson said.
“We started with one week of data and we sat down and said, ‘OK, what do we do about this?’ It’s one week of data. We don’t normally price on one week of data,” Wilson said on a media conference call Monday. “In about a week and half, we pulled this off. There was not one debate in our company about whether we should do this or not.”
Allstate said its first-quarter underwriting income will be cut by about $210 million before taxes because of the payback to holders of 18 million policies, with the remainder of the payback to be recognized in the second quarter. The company is also offering free identity protection for the rest of the year and payment relief for struggling customers, the Globe reported..
Research contact: @BostonGlobe