Some Insurers Offer a Break for Drivers Stuck at Home

“We know there’s been a significant reduction in miles driven and claims filed for personal vehicles since the pandemic began limiting people’s activity,” American Family wrote in an F.A.Q. on the repayments. “We are not seeing similar claim trends in our other lines of insurance, such as homeowners where filed claims are increasing, likely from people staying home more, resulting in more accidents.”

(Be careful with those fireplaces, please.)

Allstate and American Family’s relative largess does raise a question though: Just how good have the stay-at-home orders been for auto insurers’ bottom lines?

Allstate’s chief executive, Thomas J. Wilson, said the company was acting on relatively little information right now. But what it has gathered was eye-opening. “After one week’s worth of data came in, we knew this was significant,” he told me. “And it was less than two weeks from when we first saw the data to when we made this announcement.”

Mr. Wilson said that driving to work was usually about one-third of people’s total miles on the road. But there are many unknowns insurers are still facing as a result of the stay-in-place orders, he said.

The people who are still driving are driving faster, based on Allstate’s data. Will they crash more and do more damage when they do have a wreck? How long will the pandemic last? When it ends, will everyone still want to — and get to — work from home twice a week?

Article source: https://www.nytimes.com/2020/04/06/business/coronavirus-car-insurance.html