Auto insurance companies are offering financial relief to customers while stay-at-home directives reduce the number of people driving during the coronavirus pandemic.
Companies offering relief assistance include Erie Insurance, GEICO, Progressive, State Farm, Allstate and Travelers.
Erie Insurance said it would provide $200 million in dividends directly to personal and commercial auto insurance customers, representing about 30% of related auto insurance premiums over a 2-month period or 5% of a customer’s annual premium.
Checks will be mailed directly to customers in mid-May. Customers who had policies as of April 1 will receive payments.
Earlier this month, the company said it would reduce rates for auto insurance customers, bringing them an estimated $200 million in financial relief.
“We stand by our customers during times of hardship and catastrophe and our response reflects who we’ve been for 95 years: a company that’s always there for our customers and a company that is truly Above All in Service,” Erie Insurance President and CEO Tim NeCastro said in a statement.
GEICO is giving a 15% credit to all auto and motorcycle customers between April 8 and Oct. 7. The credit also will apply to any new policies purchased during that period. Customers will see the credit when they renew their policies.
The credits are expected to average $150 per auto policy and $30 per motorcycle policy. Customers don’t need to do anything to receive them.
“GEICO is giving back to our customers during this critical time because we are all in this together,” the company’s website says. “We value our customers and understand how this pandemic has created challenges for all of us.”
Progressive customers who have personal auto policies at the end of April or May will be receive a 20% premium credit. That means a customer with a 6-month policy premium of $900 would receive a credit of $30 for April, and an additional $30 for May if the policy stays active.
Progressive also waived late fees, paused collections and stopped cancelling or non-renewing active policies due to non-payment through May 15.
“During this unprecedented time, we know you may be experiencing stress and financial hardship,” the company said on its website. “While you’re doing your part to fight the pandemic, we’re committed to being there in your time of need.”
State Farm mutual auto policyholders who had policies in place between March 20 and May 31 will receive a dividend as early as June. Customers with other types of auto insurance will receive the dividend as a premium credit to their policy, the company said. The credit will be about 25% of a policyholder’s owed premium for that time period, which works out to about $20 per month for each vehicle insured.
The $2 billion dividend is the single largest dividend paid to customers in State Farm’s history, the company said in a news release.
“This dividend is one of the ways we’re working to help our customers during this unprecedented situation,” Chairman, President and CEO Michael L. Tipsord said in a statement.
AllState is giving back more than $600 million to its auto insurance customers in April and May. Customers will, on average, receive 15% of their money premium in April and May. The money will be deposited to a customer’s bank or credit card account, or the credit will be applied to their insurance accounts.
Travelers Insurance is also giving its personal auto insurance customers a 15% credit on their April and May premiums. The credits will be applied to customers’ accounts.
“Our new program recognizes their contribution to the effort we all need to make to protect our health and safety and the resulting decrease in miles driven and auto claims,” Alan Schnitzer, Chairman and Chief Executive Officer of Travelers, said in a statement.