State Farm and USAA have joined a growing group of auto insurers that will give credits and rebates to customers affected by the coronavirus pandemic.
Social distancing requirements and business shutdowns covering an estimated 95 percent of the U.S. population have resulted in less driving and fewer accident claims, the companies said.
Allstate and American Family Insurance said earlier this week they will refund a portion of premiums paid by drivers because they are driving less. Other insurers that have announced similar moves are Geico, Liberty Mutual, Farmers, The Hartford, Liberty Mutual, Nationwide, Progressive, Safeco and Travelers.
State Farm, the nation’s largest auto insurer, said it will issue dividends totaling $2 billion to auto policyholders, with most seeing a 25 percent credit for the three-month period from March to May.
“State Farm is returning value through a dividend to our customers,” said State Farm Chairman, President and CEO Michael Tipsord. “We insure more cars than anyone and we see from our claims activity people are driving less. This dividend is one of the ways we’re working to help our customers during this unprecedented situation.”
Tipsord added that the dividends will automatically appear as credits on customers’ policies.
USAA, the United States’ fifth-largest property-casualty insurer, said it will return $520 million in premiums.
Citing stay-at-home and shelter-in-place guidance, the insurer said it will issue a 20 percent credit for April and May premiums.
“We understand the impact this pandemic is having on our country, and especially our military community and their families, many of whom also are working on the front lines of the crisis,” said USAA President and CEO Wayne Peacock. “Returning premiums provides timely help for our members.”
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