A major auto insurer in the United States pays millions of dollars to customers stranded at home during coronavirus blockages.
Allstate, the country’s fourth largest auto insurer, said it would return a total of $ 600 million (£ 490 million) to customers.
Another insurer, American Family Mutual, also reimburses customers, with checks totaling $ 200 million.
The two have seen a dramatic drop in accident claims, with residents staying at home and off the road.
Repayments are timely, with millions of households suffering financially from blockages across the country.
Allstate will reimburse customers in two ways. Drivers in quarantine will receive refunds, while most customers will receive a 15% discount on monthly premiums in April and May. The discounts will apply to 18 million customers.
“It’s just because less driving means fewer accidents,” said Tom Wilson, managing director of Allstate. His data showed that driving mileage was down between 35% and 40%.
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American Family Mutual said it would make a single payment to all customers. “They drive less and have fewer claims. Because of these results, they deserve premium relief, “said chief operating officer Telisa Yancy.
The insurer, which operates in 19 states, estimates that policyholders traveled 40% fewer miles in the last three weeks of March.
“There are very few silver trims, but auto insurance companies are certainly among them,” said Paul Newsome, an analyst at investment bank Piper Sandler.
The refunds could put pressure on other auto insurers around the world to make refunds due to a drop in driving, especially due to commuters now working from home. Quieter roads are likely to result in fewer accidents and future accidents.
It is not yet clear whether travel insurers could follow annual policies, since fewer people travel abroad.