Auto Insurance Must be Priced Fairly During the Coronavirus Pandemic
Texas Appleseed sent a letter to Texas Insurance Commissioner Kent Sullivan, asking the Department to make sure Texans are charged fair prices for auto insurance during and after the pandemic.
With much of the state under shelter-in-place orders, mobility of Texans is down 40% to 55% since the escalation of the pandemic in late February. This reduced mobility has translated into fewer claims for auto insurers.
Over the past week, a growing number of auto insurers have announced premium refunds or credits as public pressure has mounted. Though these announcements are commendable, each policy is different, calling to question the fairness of the rebates or credits being offered. And, some companies have so far offered nothing. Auto insurers in Texas are required by law to base pricing on risk. Rebates based on reduced risk for claims should not be discretionary. They should be the rule.
Auto Insurers Operating in Texas Who Have Announced Credits or Rebates*
As of April 10, 2020
Company with Total Amount Nationally
Allstate
$600,000,000
15% rebate for April and May monthly premium.
USAA
$520,000,000
20% credit for 2 months of insurance premiums for all customers with active policies as of March 31, 2020.
Geico
$2,500,000,000
15% credit for all policies upon renewal between April 8 and October 7.
Farmers
No Total Released
25% reduction for April insurance payment.
Progressive
$1,000,000,000
20% credit for April and May premiums.
Liberty Mutual
$250,000,000
15% refund on 2 months of insurance payments.
Travelers
No Total Released
15% credit for April and May premiums for all personal auto insurance customers.
Nationwide
No Total Released
$50 one time premium refund for people with active policies on March 31.
State Farm
$2,000,000,000
25% credit for premiums between March 20 and May 31.
In addition to premium rebates, Texas Appleseed is asking for rules that suspend the use of credit scores in insurance pricing for at least one year after the end of the emergency declaration. As unemployment soars and families struggle to cover basic expenses, insurers should not penalize people for the economic crisis caused by the pandemic.
The Texas Department of Insurance must use its authority to ensure Texans pay a fair price for their auto insurance. The current economic hardship in our state is unprecedented. Action is needed now to help Texans navigate this crisis and rebuild in the aftermath.
You can contact the Texas Department of Insurance to share your concerns and support comprehensive action by the Department:MediaRelations@tdi.texas.gov.
* Please visit each auto insurance company website for the most recent information.