Reduction in Driving Because of Covid-19 Leads to Auto Insurance Refunds

For many of us, driving habits have changed dramatically since the onset of the Covid- 19 pandemic. Road traffic is down upward of 75%, and accidents have followed suit, with only 2,000 accidents reported in Massachusetts in the month of April 2020, compared to 12,000 in April 2019. Sadly, there were slightly more fatalities in spite of fewer cars on the road.  

In recognition of the reduction in usage and claims, the auto insurance community plans to return a small portion of their clients’ premiums for at least the months of April and May 2020. As strange as it may sound, the insurance carriers actually have to get permission from the Massachusetts Division of Insurance to give refunds to their customers. It’s true. Any rate or coverage change by a carrier has to be reviewed and approved by state regulators. Something tells me that the regulators will approve the refunds more quickly than they usually approve rate increases.

The three primary auto insurance carriers represented by Ostrander Insurance Agency have agreed to give at least 15% of the monthly premiums for April and May back to the insured. Commerce (Mapfre) Insurance Company will be returning over $30M to their clients. Plymouth Rock Insurance Company is allowing customers to “pay it forward” or donate their credit to charities dedicated to relieving those hit hardest by the Covid-19 pandemic. Norfolk & Dedham Mutual is the most generous, allowing a credit of 20% of the April and May premiums.  

Plymouth Rock and N&D Mutual are giving credits or issuing checks right away, while Commerce (Mapfre) is holding off until June 30th. You do not have to do anything to receive the credit/refund. It will be issued automatically based on your premium.

Besides offering the modest discounts, all of our carriers are also being very accommodating. Customers whose livelihood has been seriously hurt by Covid-19 can call the carrier directly to make billing arrangements. In some cases, cancellations for non-payment are being stretched out to an extent that we have never seen previously. If you are someone who would benefit from an extension or a reduced payment in the short term, you should work with your agent or carrier. They want to help.

Aside from what auto insurance carriers are doing, the RMV is granting extensions on registration and driver license renewals without penalty. State inspections for vehicles have also been extended. From what I’ve read, police officers are ticketing 90% fewer drivers for moving/driving violations compared to a year ago. They too are helping to let more money stay in the pockets of Massachusetts drivers while keeping themselves safe by avoiding human interaction. Strange times, indeed. 

 This article was submitted by Dick Ostrander of Ostrander Insurance (www.OstranderInsurance.com). Dick can be reached at [email protected] or 508-966-1116.