With driving and wrecks still virus limited, do insurers owe customers more?

dcemptystreets-300x200Auto insurance companies and agents may have sent customers cards, fridge magnets, or calendars as part of their holiday cheer. But tens of millions of motorists may wish to demand more — both much more, and less.

Consumer advocates say the coronavirus pandemic has curtailed driving and claims for wrecks enough still that auto insurers — who are raking in big profits — need in the new year to fork over more refunds or premium reductions, the New York Times reported.

The newspaper reported that advocacy organizations like the Consumer Federation of America and the Center for Economic Justice, have investigated and “found that car crashes remained ‘well below’ 2019 levels”:

“The groups examined state accident data from Colorado, Maryland, Massachusetts and Texas, comparing March through October with the same period in 2019. The study found about 181,000 fewer accidents, including 83,000 fewer after May, when most insurers stopped providing refunds. (California, the report noted, ordered insurers to provide premium relief through the summer.) ‘That’s extraordinary,’ Doug Heller, an insurance expert with the consumer federation, said of the drop in accidents. The two groups sent letters to state insurance commissioners, urging them to require another round of refunds. The groups didn’t specify an amount, but their report suggests refunds should be proportionate to a company’s reduction in claims, with an adjustment for expenses.”

The companies may be flush enough these days to help consumers, especially because tens of millions of Americans are struggling mightily during the pandemic with joblessness, hunger, and housing worries. As the consumer groups also found, the New York Times reported:

“[I]nsurers have been reporting significant increases in profits from their auto insurance business, at least in part because of fewer auto crash claims during the pandemic. Progressive, for instance, noted in its third-quarter regulatory filing that its underwriting profit — income from premiums after claims and expenses are paid — rose 66% for the quarter and 44% for the first nine months of 2020 ‘primarily’ because of ‘lower auto accident frequency’ than in 2019.”

Insurers already have cut some breaks for customers, including $14 billion in returns due to lower driving and $280 million in donations to charitable causes, industry organizations say. But there are conflicting views of insurers’ generosity, the newspaper noted, quoting Teresa Murray, director of the U.S. Public Interest Research Group’s Consumer Watchdog office”

“Insurance relief offered in the spring typically ‘shaved 15% to 25% off customers’ premium payments for one or more months, according to a report in October from the National Association of Insurance Commissioners, a group of state regulators. But a report published by U.S. PIRG’s Education Fund affiliate, examining relief given by the 10 top insurers in each state, found that most hadn’t given customers more than half of one month’s premium. ‘Overall, they were pretty stingy,’ Ms. Murray said.”

Progressive told the New York Times it gave its customers premium credits of 20% in April and May, a payout totaling about $1 billion and the company said it lowered auto rates in more than 40 states from April through December and would “continue to monitor our driving and claims data to determine where additional actions are warranted.” The newspaper quoted the Consumer Federation finding that in many states, State Farm, GEICO, and USAA provided “better” relief than competitors:

“State Farm, for instance, gave policy credits averaging 25% for about 2½ months — close to the 30% suggested by the Consumer Federation at the time — and reduced rates an average of 11%GEICO gave 15% off entire policies renewed or purchased from April 8 to Oct. 7. USAA gave a 20% credit for March through May and 10% in June and July.”

The newspaper suggested that customers contact their agents to discuss, with detailed information on hand about major changes in their driving (say, that they have been told by employers to work from home until a specified date this year), to potentially qualify for lower cost coverage.

Persistent, polite negotiation may be required if experience holds true.

In my practice, I see not only the harms that patients suffer while seeking medical services, but also the damage that can be inflicted on them and their loved ones by car, truck, and motorcycle wrecks. They may not be occurring with the same frequency as before the pandemic, but crashes on the road can be devastating still to deal with, including dealing with suddenly chummy auto insurance agents.

Don’t forget, whether determining rates or “assisting” customers after a wreck, insurers look to their bottom lines and they and their agents are eager to ensure profits. A great agent can be helpful.

But make no mistake: For my colleagues and I, our first job after a road mishap likely is to get the insurer off your back — to give you the space you need to recover from your crash injuries as much as possible. In any serious injury case, the healing process usually takes at least a year. Once we know your condition is stabilized, we present comprehensive claims information to insurers to give them a chance to make a fair settlement after your motor vehicle accident. If they do not make a fair offer (and that is the rule with many insurers, unfortunately), we do not hesitate to take your case to court by filing a lawsuit on your behalf. Sometimes that brings some rationality to the defense when they see that we will not let them push you around. But if they still do not see reason, we pursue the case all the way to trial.

The new year is a great time for a financial tune-up and saving some bucks on car insurance. It also can provide customers a glimpse of what kind service agents may offer them. Hint: if they can’t give a fast, courteous, and productive response on an issue like rates, how useful will they be in the  condition you may be in after a bad road wreck?

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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