If you are using Allstate for your auto insurance, you will be seeing a “payback” soon. Shelter-in-place ordinances have caused a huge reduction in driving. Since less driving translates to fewer accidents, Allstate customers will be receiving a 15% reduction in their monthly premium for April and May.
In total Allstate will be returning over $600 million to its customers. The paybacks will come in the form of a credit to a users bank account, credit card, or Allstate account. Tom Wilson, the CEO and chairman of the company explained the decision saying, “Allstate has been helping customers overcome catastrophes for 89 years since our purpose is to make sure they are in Good Hands. We have learned to move quickly and put people first…This crisis is pervasive. Given an unprecedented decline in driving, customers will receive a Shelter-in-Place Payback of more than $600 million over the next two months. This is fair because less driving means fewer accidents.”
In this way, auto insurance companies are in the one industry experiencing a silver lining from the coronavirus pandemic. They are still receiving premium payments even though the number of accidents have decreased drastically. Analysts are expecting insurance companies that specialize in auto coverage, like Geico, Progressive, Travelers, and Allstate, to see great profits in their first quarter reporting.
Allstate is going further than the paybacks, it’s also expanding personal auto insurance policies to include customers who are using their own vehicles for delivery services necessary for survival in the lockdowns.
Furthermore, the company has rolled out the Special Payment Plan, which is designed to grant more flexibility to those who have been financially hit by the pandemic. This plan will allow customers to delay two consecutive premium payments, for both auto and homeowner insurance, without added fees.
Allstate’s decision will most likely start a market trend, leading other auto insurance companies to follow suit. Still, it is a great public relations move for Allstate to be the first to display this level of care for the people they serve.