April 3, 2020

Auto Insurance Premiums Face Downward Pressure Due to COVID-19

Auto Insurance Premiums Face Downward Pressure Due to COVID-19


Stay-at-home orders
and other travel restrictions due to COVID-19 have limited the number of miles
being driven and have consequently put pressure on auto insurers to rebate
premiums or otherwise provide offsets, S&P Global Market Intelligence reports.

While U.S. private
auto direct premiums written have not declined by more than 0.3 percent on a year-over-year
basis in at least the past two decades, the pandemic risks maintaining this
record. Certain state regulators and auto insurers are now taking steps to give
financially burdened consumers additional time to make payments.

However, the article says, those steps may not be enough as public pressure increases. The Consumer Federation of America has proposed that auto insurers provide monthly offset payments to consumers to avoid what it alleged to represent the “windfall” profits  the industry would otherwise produce.

Related:

Coronavirus
takes toll on U.S. auto sales



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