With fewer out driving, insurance commissioner calls for premium refunds

Apr. 7--With many vehicles languishing in garages as a result of social distancing to limit the transmission of the novel coronavirus, the insurance giant Allstate pledged Monday to refund $600 million from premium payments, a sum that was earmarked to cover auto accidents this spring that will never come to be.

Across the country, customers of Allstate and subsidiaries Esurance and Encompass will receive a 15 percent refund of their monthly premiums for April and May, as credits to their bank accounts, credit cards or Allstate accounts.

American Family Insurance is following suit, pledging on Monday a $200 million refund. The Wisconsin-based underwriter has a Connecticut customer base worth more than $7 million in premiums collected in 2017, the most recent year for which the Connecticut Insurance Department has posted data.

Late Monday afternoon, Connecticut's insurance commissioner asked for all insurers to consider lowering premiums on auto insurance, noting fewer vehicles on the road as well as many customers needing the financial relief. Commissioner Andrew Mais encouraged insurance policyholders to ask their carriers for reduced premiums, if no offer is forthcoming immediately.

As a group, auto insurers collected nearly $3.5 billion in premiums from Connecticut households and businesses in 2017, working out to an average monthly tally of $288 million.

The Geico subsidiary of Berkshire Hathaway is the largest auto insurance underwriter in Connecticut, with a $580 million book of business in 2017. Progressive and Liberty Mutual joined Allstate in logging more than $300 million in Connecticut premiums that year, with Travelers and State Farm topping the $200 million threshold.

Nearly two weeks ago, Geico provided a relief valve for many customers, stating it would not cancel coverage through April 30 due to non-payment or the expiration of policies. The company did not respond immediately Monday to a query on whether it would follow the leads of Allstate and American Family in issuing refunds.

A Progressive representative indicated Monday the company is considering the possibility for its own customers.

"We're both aware and sensitive to how (COVID-19) and the various state shelter-in-place orders are altering the lives of our customers and the whole country," stated Progressive spokesperson Jeff Sibel. "We're ... exploring how to best return some premium to customers to reflect the decreased exposure that comes with less frequent driving during the pandemic and expect to have those plans in place soon."

Progressive has pledged to allow customers until May 15 to pay any premiums due, as has Travelers, which is a major Hartford-area employer. Travelers has taken another step to help out the independent brokers that steer it business, in accelerating the payment of $100 million in commissions.

Alex.Soule@scni.com; 203-842-2545; @casoulman

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