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Seven Seven Lakes Lakes
For once in my lifetime, just once,
I would like to see big business
treat average citizens fairly during
an economic crisis like we are all
currently experiencing.
US auto insurance companies
are making billions more in profit
each month as Americans stay off
the roads during the coronavirus
outbreak.
As the virus continues to spread
throughout the US, far beyond the
hotspots of New York, California,
and Washington, most of the
country has suspended travel plans
and is largely staying indoors. Many
people are working from home and
not commuting. Others have lost
their jobs altogether.
STAY HOME
STOP THE SPEAD
Auto Insurers are Collecting
Billions in Extra Profit
as we all Shelter In Place
All this means that Americans
are driving fewer miles. Fewer
cars on the road means fewer
accidents. Fewer accidents means
fewer claims. In China, where the
coronavirus pandemic is further
along than it is in the US, auto
insurers have already reported a
steep decline in payouts.
According to a letter sent to state
insurance commissioners earlier
this month by the Consumer
Federation of America (CFA) and the
Center for Economic Justice (CEJ),
two nonprofits that advocate on
behalf of consumers, the reduced
traffic translates into an estimated
$50 more per month, per auto
policy, for insurance companies.
It may not sound like much until
you consider the fact that there
are 268 million cars in the US. And
although not every car on the road
is insured, it still adds up to about
$2 billion a month in “excessive
profits,” Douglas Heller, an
insurance expert at the Consumer
Federation, told Quartz.
The CFA and CEJ believe the extra
money should be returned to
policyholders.
“This premium relief will ensure
that rates are not excessive,” the
organizations said in the letter.
“Failure of insurers to offset
premiums will provide insurers
with a windfall—premiums based
on claim costs associated with
a substantially overestimated
amount of miles driven.”
CEJ executive director Birny
Birnbaum, who co-authored the
letter, was not aware of any large
companies offering rebates. Some,
however, have offered extended
grace periods for non-payment of
premiums, Birnbaum said.
He said Alaska’s director of
insurance issued (non-binding)
guidance encouraging insurers to
provide relief based on reduced
mileage. On the other hand,
Hunter, the former commissioner
of insurance for the State of Texas,
said New York has been “nonresponsive
given the huge drop in
driving there.”
If some of the big insurers agreed to
give refunds to consumers, others
might follow, Hunter explained.
“They really look bad if they don’t
do something here,” he told Quartz.
“Windfall profits on the backs of
[the] newly unemployed.”
Asked for comment, the National
Association of Insurance
Commissioners, which represents
state insurance directors, said it
“does not have an opinion” on the
issue.
“These companies are making a
fortune now because nobody’s on
the road anymore,” Ratcliff told
Quartz. “This is just an example of
the industry never letting a crisis go
to waste.”
By: Brittany Samuels SLN Reporter
Source: Daily Brief