NJM Insurance Group sends a second rebate as motorists inch their way back

NJM Insurance Group, New Jersey's second-biggest auto insurer, said it would provide $27.7 million in rebates in a sign that motorists have yet to return to their pre-COVID-19 routines.

The rebate, expected to arrive in the coming weeks, gives its policyholders a consolation prize for a pandemic that has decimated the state's economy.

Drivers "aren't back yet," said Tom Kloza, global head of energy analysis for the Oil Price Information Service, a Wall-based research group. "I think it's really up in the air. Driving was about 50% lower across the country in early April. And Easter week, gas consumption was roughly the same as it was in April 1968."

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NJM Insurance Group, based in Ewing, insures about 831,000 people in the Garden State, or 14% of the market, trailing only Geico, according to figures from the New Jersey Department of Banking and Insurance.

The department in March required insurers to provide premium refunds, noting the pandemic dramatically reduced driving -- and the risks associated with it.

Back then, NJM Insurance returned $41.7 million to policyholders. The company this week said its next rebate would represent a 15% discount on two months of an annual premium.

The pandemic's impact on the economy has been readily apparent on the roads, where the bustle of every day life dissipated.

Retail sales of gasoline in New Jersey and the rest of the Northeast bottomed out the week ending April 11, when they were down 51.4% from the previous year, OPIS reported.

By July 4, volume had begun to bounce back, particularly at the Jersey Shore, where visitors flocked to beaches. But it still was down 17.9% from last year, OPIS said.

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The slump in demand has its merits. Office workers have skipped their grinding commutes. Motorists have gotten insurance rebates. Towns have blocked off streets to create pedestrian plazas.

And the average price of a gallon of gasoline on Tuesday was $2.18, about 23% lower than last year, according to AAA.

Left unknown is whether consumers will want to hang onto parts of their new lifestyle when the danger of the coronavirus fades.

"In my view, driving and gasoline demand Is never going to come back to the levels it was at in 2017, 2018 and 2019," Kloza said.

Michael L. Diamond is a business reporter who has been writing about the New Jersey economy for 20 years. He can be reached at [email protected].

This article originally appeared on Asbury Park Press: NJM Insurance Group sends a second rebate as motorists inch their way back

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