PHOENIX (3TV/CBS 5) -- The Consumer Federation of America is fighting for lower auto insurance rates for Arizonans as the coronavirus pandemic continues to sweep through the country, 3 On Your Side has learned.
Bob Hunter, the director of insurance for the Consumer Federation of America, sent a letter to the Arizona Department of Insurance, calling on the state to require insurance companies to extend refunds on premiums through the summer.
"During March, April, and May, people got some discounts," Hunter said. "The insurance companies are making huge amounts of money, even when they’re kicking back some of it. And now they’re not kicking it back anymore."
"I'm asking the insurance commissioner to do something to control what I call 'COVID profits'," he added.
In the letter, Hunter argued "Businesses are shuttering and fewer drivers will be on the road leading to fewer crashes and a corresponding reduction in claims paid out by insurers."
Stephen Briggs, a spokesperson for the Department of Insurance, confirmed the agency received the letter and is reviewing it.
Janet Ruiz, a spokesperson for the Insurance Information Institute (III), which represents dozens of insurance companies, says a state mandate for reduced rates is not necessary.
"The insurance industry has given back over $14 billion in premium relief," Ruiz told 3 On Your Side. "The insurance companies are already working with their departments of insurance in every state to make sure we are charging fair rates. Some companies have already started decreasing rates overall. Some are giving more premium refunds."
State Farm said it is implementing rate reductions for its auto insurance customers totaling $2.2 billion. According to Angie Harrier, a State Farm spokesperson, the average rate reduction for the company's 950,000 customers in Arizona is 7.6%. The rate reduction is in addition to dividend credits the company announced in April, which most customers will see in their July bills.
"This is the single largest dividend paid to customers in our company’s history and is one of the largest returns of value in the industry," Harrier said. "We're proud of the work we're doing to support our customers through these uncertain times."
Nationwide and Travelers have not committed to an extension of rate reductions through the summer months, but both companies said they are continuing to monitor driving behavior.
"To the extent that lower miles driven or claims volume persists, we will take that favorability into account in future renewal rates," Joe Case, a spokesperson for Nationwide, wrote in an email. "Some of this favorability may be offset by higher repair costs driven by more high-speed crashes and higher auto repair shop costs."
Travelers is taking a similar wait-and-see approach.
"We’ve credited 15% of our customers’ personal auto insurance premiums in April, May and June, and we’ll continue to monitor the driving environment," As always, we remain committed to working with the Arizona Department of Insurance and will comply with all state mandates and regulations," a spokesperson for Travelers told 3 On Your Side.
Consumers are ultimately in the driver's seat. If you're driving less, make sure your insurance company knows.
"Usually premiums are based on about a six month period, so if you’ve been driving less and continue to work from home, report that to your insurance company," Ruiz said.
III also recommends consumers consider these tips to lower premiums:
- If you drive an older vehicle consider dropping comprehensive and/or collision from your auto insurance policy
- Enroll in safe driving/telematics programs that your insurance company offers
- Contact your insurance company with questions regarding your renewal
- Consider raising your deductible
Consumers should also regularly shop around to compare rates.