Are auto insurance COVID-19 credits really saving drivers money?

PALM BAY, Fla. — The pandemic emptied highways. The number of crashes dropped drastically and so did insurance claims. That's why some insurance companies gave their customers premium refunds.

But in Palm Bay, GEICO customer Harvey Kriegsman says it doesn’t add up.

“To me it's an advertising type thing. It sounds good but it doesn't mean anything,” Kriegsman said.

At first Kriegsman’s give-back credit from GEICO, $183 for the last six months, seemed like a good deal. Then he says the company increased his premium, so he lost all the savings and will pay a higher rate for the rest of the year.

“Don't raise the price by 30% and give back 15%. You haven't done anything,” Kriegman said, explaining his insurance policy cost.

Since April, many insurance companies have announced premium credits or future discounts of 15% to 20%.

But many consumer watchdogs say providers don't offer real relief.

“Right now going into summer, every Floridian and most Americans are paying too much for auto insurance under this new normal,” said Douglas Heller with the Consumer Federation of America.

Heller believes mileage and insurance claims are down more than 70% so rate relief should be a lot more than the average 15% offered.

“Should anybody be raising rates now?” asked Action 9’s Todd Ulrich.

“Not a single company should be allowed to raise rates for the next six months,” replied Heller.

The Consumer Federation found only three states have ordered rate relief during the pandemic. Florida is not one of them.

“But in Florida we don't have a process for that and we let the companies decide, and some decided customers get nothing back,” Heller said.

Florida’s Department of Financial Services received 20 complaints related to COVID-19 premium policies. The agency applauded discounts but declined comment on its regulation.

But the agency’s consumer advocate, Tasha Carter, told Ulrich future rate increases need to reflect the new driving normal.

“To require them to review their rates and any rate changes based on reduced mileage driven and reduced claims that have been filed,” Carter said.

GEICO told Action 9 it’s reviewing Kriegsman’s complaint and working towards a resolution.

If you’ve cut back on driving, consumer experts say contact the insurance provider with your new mileage. But, don’t cancel coverage because insurers charge more when you need a new policy, they warn.

Florida Department of Financial Services response:

The Department’s Division of Consumer Services has received 20 complaints related to automobile insurance premiums that mention COVID-19 or the coronavirus.

CFO Patronis has applauded auto insurance companies who provided premium relief options to Florida consumers as a result of the effects of the COVID-19 pandemic. During these unprecedented times, it is important that insurers look for ways to step-up and support Florida consumers.

If consumers are in need of assistance with automobile insurance or have questions regarding premium issues, they can call our toll-free insurance consumer helpline at 1-877-MY-FL-CFO (693-5236).

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