Coronavirus Insurance Rebate: Allstate Reducing Auto Premiums For April, May

Allstate and its subsidiaries announced Monday $600 million in car insurance premium refunds because of coronavirus stay-at-home orders have cut significantly the amount of driving Americans are doing. The Northbrook, Illinois, carrier also said it would delay payments for those experiencing financial difficulties as a result of the pandemic.

“This crisis is pervasive. Given an unprecedented decline in driving, customers will receive a Shelter-in-Place Payback of more than $600 million over the next two months. This is fair because less driving means fewer accidents,” Chairman, President and CEO Tom Wilson said in a press release.

American Family Insurance said it would return $200 million to auto insurance customers because of the reductin in driving.

“We are financially strong, and in a position to provide these payments to our customers at a time when it makes a meaningful difference,” CEO Jack Salzwedel said in a press release.

American Family, which operates in 18 states, said it would begin mailing checks to Wisconsin customers by midmonth, with an average $50 for one vehicle or $100 for two.

Allstate (ALL) also is offering free identity protection to its clients for the rest of the year “since our lives have become more digital.”

Allstate, Esurance and Encompass will rebate 15% of April and May premiums. The money will be returned on credit cards, through bank accounts or through a customer’s Allstate account.

“The fastest way for customers to receive this payback is to utilize the Allstate Mobile app. We are working with state insurance regulators to move forward expeditiously,” Allstate said.

Allstate said it has set up a special payment plan for those suffering financial difficulties as a result of the pandemic that waives penalties. The plan applies to both auto and home insurance and would extend for two consecutive months. It also allows customers to pay what they can afford with the balance to be made up in the future.

Another change in policies involves extending coverage on personal vehicles used to deliver food, medicine and other goods for commercial purposes – something that traditionally has required coverage for business use at a higher premium.

“Many people have started delivering goods to help others, earn money and to support businesses and social service organizations that have expanded their delivery services. Allstate is ensuring our customers have protection in the coming months,” the company said.

American Family said it would donate $6.8 million for COVID-19 relief, including 2-to-1 matches for charitable donations by agency owners and employees.

Americans drive an average 13,476 miles annually – many of those miles to and from work. Allstate said it is analyzing 280 billion miles of driving data collected through its 23 million active telematics connections.

Allstate was trading up more than 6% in early afternoon.