You are hereHome >
PHILADELPHIA -- While COVID-19 is causing financial difficulties for tens of millions of Americans, auto insurers nationwide have made tens of billions of dollars in profit because consumers have driven significantly less during the pandemic. Most Americans have been largely staying home to protect themselves and others from the coronavirus, meaning fewer wrecks and fewer claims and bigger profits for insurance companies.
The U.S. PIRG Education Fund surveyed the 10 largest auto insurers in every state and Washington, D.C., to document how each handled its windfall this year. Most insurers gave only a small fraction of the profits back to their customers.
“There is a fundamental imbalance here. As Americans struggle to get every penny together to pay for necessities, insurance companies are reaping the benefits from people who’ve had to change their lives for their own health.” said Jacob van Cleef, U.S. PIRG Education Fund’s Consumer Watchdog Associate.
As the year draws to a close, many Americans find themselves in economic peril. The Center for Disease Control and Prevention’s (CDC) eviction moratorium, the federal student debt repayment freeze and workers’ unemployment benefits could all be coming to an end soon. That will leave millions of Americans struggling to pay bills during an economic crisis, so every dollar matters. Insurance companies making tens of billions of dollars off of these same Americans could be the difference between their customers living in their homes or in their cars in 2021.
Here are some key findings about the insurers’ COVID-19 relief to their customers:
Out of the 10 largest insurers of personal vehicles in each state, only 18 out of 71 companies returned at least 50 percent of one month’s premium. Of those, only eight offered at least one month’s premium in relief.
Virtually all of the insurers issued rebates, credits or rate reductions automatically, but at least one required customers to ask.
Some insurers gave no relief to their customers. Others claimed to give financial breaks without providing us details.
Only four insurers reduced long-term rates by a defined percentage. Rate cuts are best for consumers over the long term.
“Insurance companies shouldn’t get a pass because they donate money to charities while giving little back to their customers,” van Cleef said. “State governments need to step in. They are the only ones who can make sure that Americans get the rebates and refunds they deserve.”
Your donation supports Iowa PIRG's work to stand up for consumers on the issues that matter, especially when powerful interests are blocking progress.