Hanover, Mapfre among insurers offering discounts

Two Central Massachusetts-based insurance companies are among several insurers offering discounts on auto insurance during the coronavirus pandemic.Fewer motorists are reportedly on the roads as social distancing and stay-at-home requests have become the norm.

The Hanover Insurance Group of Worcester on Friday created The Hanover CARES Refund, through which the company will return 15% of April and May auto premiums to its eligible personal lines customers, providing financial relief during the coronavirus pandemic.

The company also said it will undertake additional customer relief measures and pledged to contribute $500,000 to nonprofits in local communities to address needs arising from the public health crisis.

The additional measures include flexibility on bill payment options for those experiencing financial hardship, without penalties and fees, including placing a 60-day hold on cancellations and non-renewals for non-payment. It's also providing medical supplies and protective masks to area hospitals.

The contributions include $350,000 to local United Way, Boys & Girls Club and chamber of commerce organizations in Massachusetts and Michigan, where the company employs large concentrations of employees.

"We recognize our customers are feeling significant stress, including financial pressure, as a result of this pandemic," said John C. Roche, president and chief executive officer at The Hanover. "Our company has a long, proud tradition of being there when we are needed most, delivering for those who depend on us. We are committed now, as always, to do what we can to help our customers, partners and home communities manage through these difficult times."

Mapfre Insurance of Webster launched its Staying Home Refund program this week, which will return 15% of April and May premiums to its voluntary personal auto policyholders in Massachusetts, totaling more than $30 million.

On average, most policyholders will receive a credit of approximately $40, the company said. A similar credit will be provided to the company's personal auto policyholders in its other states of operation during the same time period.

"We understand that our policyholders are facing a number of challenges, as we all focus on the health and safety of our loved ones," said Mapfre USA President and CEO Alfredo Castelo. "We know that many of them are driving less as they stay at home during this time, and our program recognizes this change in driving behavior. We are committed to being there for our customers, so they can focus on what is most important to them."

Mapfre, which serves policyholders in 14 U.S. states, is also offering flexible payment options.

As a result of declines in traffic and crashes, consumer advocates are calling on insurance companies to cut premiums or give refunds by a like amount.

Hanover and Mapfre are among many companies that have responded, but the Consumer Federation of America reports that discounts may be too small and aren't being applied evenly.

Many insurance premiums are based on driving 1,000 miles per month, but customers may be driving only one-tenth of that, the federation said.

"The risk exposure is not nearly the same now as when the policy was first priced," Doug Heller, an insurance expert with the federation, said Monday.

Companies that sell 82% of the auto policies in the U.S. have announced refunds or credits to drivers worth more than $6.5 billion during the next two months, the federation said.

Some, like State Farm, the country's largest auto insurer, are giving credits starting in June that amount to a 25% reduction in bills from March 20 through May 31. That's about $20 per month per vehicle, the company says.

That's the kind of immediate relief that all companies should offer because so many people have lost their jobs due to stay-at-home orders from state governments, according to the federation. Yet many are offering only 15% discounts and one, Geico, won't get the money to customers until their policies are renewed.

Insurers and the federation don't recommend canceling your insurance if your company won't offer credits or discounts. In many states, companies can raise rates if there's a gap in insurance coverage.

Liberty Mutual Insurance says that it's unwise to cancel because most states require minimum liability insurance, and even if you use the vehicle only to go to the store or other essential errands, you'll still need coverage.

"Comprehensive coverage provides insurance for things like theft and weather, so you will want to retain that coverage as well even if the car is garaged at home," a company statement said.

Material from the Associated Press was used in this report.

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