With millions of Americans forced to stay at home due to the coronavirus pandemic, the number of vehicles on the road and the number of miles driven has been drastically reduced as many people are working remotely and limited to the places they can travel to. As a result, automobile insurers have responded to calls to provide cuts and refunds of insurance premiums to reflect the fact that fewer vehicles on the road means fewer accidents occurring and lower amounts of benefits being paid out by the insurance companies.
Auto Insurers Who Have Announced Premium Cuts and Refunds
Most of the country’s largest auto insurers have announced rate reductions and refunds ranging from 10 to 30 percent and ranging from a pro-rated refund for March to reduced premiums through May, depending on the specific insurer. The timing of refunds and cuts also depends on the particular insurer, with some companies offering immediate refunds and reductions, while other insurers wait for specific approval from state insurance regulators.
The Consumer Federation of America, a consumer advocacy group, has graded the efforts of the nation’s auto insurers. For example, State Farm, the country’s largest auto insurer, received the highest grade of an A for offering an immediate refund/rate reduction of 25 percent, while Allstate received a B grade for offering 15 percent premium reductions for April and May. On the other end of the scale, Erie Insurance, a large insurer in Western Pennsylvania, received a F grade for only promising to provide up to $200 million in cuts sometime in the future.
Advocacy Groups Call for Further Premium Reductions
However, the CFA and other consumer advocates are pushing auto insurers to provide deeper premium rate cuts of up to 40 to 50 percent. The groups note that there are millions of insured drivers who have gone from driving a thousand miles a month to less than a hundred who should receive deeper discounts. The groups also argue that the aggregate premiums being returned by insurers don’t match up to their actual savings in claims; the groups are now calling on state regulators to review insurers’ data of premiums collected versus claims paid to check whether particular insurers are receiving a windfall during the pandemic. The groups are also calling on other states to follow Pennsylvania’s lead in banning insurers from raising premiums during renewals due to drivers’ reduced credit scores; many individuals are facing serious economic pressure due to lost jobs during the COVID-19 crisis.
Avoid Cancelling or Suspending Your Coverage
If you find yourself not driving as much as you used to, you should not cancel or suspend your coverage. You may find yourself needing to drive to the store or to go somewhere in an emergency, in which case you will need your vehicle to be insured. It is against Pennsylvania law to drive without the minimum required insurance coverage limits. In addition, if you cancel or suspend your coverage, you may end up being penalized by the insurance companies with a higher premium when you decide to reinstate coverage.
Instead, if your particular driving habits have drastically changed due to quarantine, isolation, or stay-at-home orders, you should contact your insurer to request an additional rate deduction based on your specific circumstances.
And if you do find yourself in a car accident during these times and are having trouble getting fair and full compensation from the insurance companies, an experienced car accident attorney can help you fight to get the financial recovery you deserve.
Contact a Pittsburgh Personal Injury Lawyer to Discuss Your Car Accident Case in Pennsylvania
Did you or a loved one sustain serious injuries due to a car accident in Pennsylvania? Don’t let the medical bills pile up while you wait for the negligent party or their insurance company to do the right thing. Right now, you need an aggressive personal injury attorney on your side, fighting to get you the compensation you need, want, and deserve. The skilled attorneys at Goodrich & Geist, P.C. represent clients injured because of car accidents in Pittsburgh and Western PA counties. Call (412) 766-1455 or fill out our online contact form to schedule a consultation about your case. We have an office conveniently located at 3634 California Ave., Pittsburgh, PA 15212.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.