Friday, 28 August 2020 17:24

Allstate, GEICO Among Large Auto Insurers Facing COVID-19 Rebate Backlash in IL

Written by Autumn Heisler, Risk & Insurance


At the onset of the COVID-19 pandemic, many large car insurers realized that their policyholders were not driving to work, school, practices, shops and more as social distancing and shelter-in-place became the norm.

In order to reflect this drop in cars on the road, large insurers began to offer rebates to customers. Liberty Mutual, State Farm, GEICO, Allstate and more offered some level of premium relief for drivers.


However, in some cases, it did not appear to be enough.


Several lawsuits have been brought to light in recent weeks alleging certain insurers failed to provide “fair and appropriate” rebates and, instead, unfairly profited from high rates.


In Illinois specifically, policyholders have come for Allstate and GEICO, as well as Progressive, Travelers and a few others, with six separate lawsuits filed in the last week of July alone.


The policyholders are alleging the insurance relief offered during the pandemic did not go far enough when accounting for the drop in claims these auto insurers were seeing during the same interval.


Statistics show miles driven by Illinois motorists dropped by nearly two-thirds during March and April.


To the policyholders, the 15% credit offered by Allstate specifically “falls short of the relief that any fair and reasonable actuarial analysis would require.”


Many of the complaints have also compared the auto insurers to their competitor State Farm, which, in April, offered most policyholders a 25% credit.

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