SAVANNAH, Ga. (WSAV) – Many of us have been driving less, much less in some cases, since the COVID-19 crisis.
In April, a list of auto insurance companies lowered rates in terms of discounts or rebates to reflect the fact that fewer cars on the roads meant fewer accidents. Thus, their rates were not reflective of the current driving conditions.
The Consumer Federation of America (CFA) applauded companies at the time that lowered rates and is now urging motorists to ask their company what is the plan after June 1.
Bob Hunter of CFA says many companies are apparently planning to return to “pre-COVID-19 rates.” But he says that there are still about 30 percent fewer vehicles on the roadways.
He does say there about 200 companies nationwide that sell auto insurance and so far five of the larger companies have indicated they will offer discounts into June.
“Anything beyond May 31, there are only five companies doing anything,” said Hunter. “That leaves 195 companies who are just going to raise their rates and make what we call a COVID windfall profit.”
CFA says Allstate, USAA, GEIGO and American Family insurance are all offering some additional discounts. State Farm has also announced it will offer discounts of up to 11 percent.
Hunter says in the case of State Farm, he has some concerns regarding the new discounts in that customers won’t get them until they buy or renew a policy in August or later.
A State Farm spokesmen told News 3 that the company “continues to look for ways to support customers.” He said the company has already announced a $2 billion dividend and that on average customers can expect a credit of about 25% of their premiums from March 20 through May 31st and that will be applied to bills beginning as early as June.”
He also told us:
“State Farm filed an average rate reduction in Georgia of 12.6% saving 1.8 million customers a total of $267.7 million; while in South Carolina an average rate reduction of 6.6% has been filed impacting more than one million State Farm customers. The total savings in South Carolina is $65.9 million. Rate changes apply to current customers when their policy renews after the August effective date of the rate change; new customers can receive a quote prior to the effective date.”
CFA’s Hunter remains concerned about how long these discounts from major insurers may last and the fact that other companies that may offer auto policies have not indicated whether they will offer any additional discounts moving forward. The consumer groups urge motorists to contact their insurance company and their state insurance commissioner.
He says only two insurance commissioners (from California in New Jersey) are taking official roles in making sure rates stay lower.
“We are asking commissioners in all the other states why they’re not stepping and requiring companies to make sure they are collecting the right data in terms of lowered claims,” said Hunter.
A spokesman for the Georgia Insurance Commissioner’s Office told News 3 they are aware of filings for lower rates from several companies and they think companies are basically doing this on their own. But he says they will continue to monitor what is happening with drivers.
Hunter believes that driving patterns will not increase to “normal” for some time, saying some people working from home may continue to do so for some time.
“We’re obviously going to be on a glide path (for increasing traffic) from the point when everybody was really locked down to whatever the new normal is,” he said.
Hunter also is calling for insurance companies to collect data including the number of accident claims on a month to month basis and says that kind of data used to determine rates would protect companies and the public.