Due to COVID-19, 2020 saw a noticeable decrease in the number of Americans driving. Working from home meant a commute to the couch rather than across town. Less driving resulted in fewer accidents, and in response, many auto insurance companies issued refunds to their customers.
However, according to an analysis by the Consumer Federation of America (CFA) and the Center for Economic Justice (CEJ), the refunds that customers received were short about $125 per insured vehicle. While customers stayed off the roads, insurance companies collected $42 billion in excess premiums. From that amount, only $13 billion was used as “premium relief” for customers – meaning they profited an estimated $30 billion. Although almost every state has laws against excessive insurance prices, the majority of insurance regulators did not encourage insurers to return their profits.
J. Robert Hunter, the CFA’s Director of Insurance, stated, “In virtually every state, auto insurance premiums – by law – cannot be excessive. The inability or unwillingness of almost all state insurance regulators to enforce the law and protect consumers raises serious questions.” In addition, Hunter explained that letters to insurance regulators made it “crystal clear” that premium relief amounts were insufficient.
Conversely, the American Property Casualty Insurance Association (APCIA), a trade group for insurers, claims that the analysis by the CFA and CEJ is inaccurate. The APCIA stated that the funds insurance companies collect are used for claims, policy services, taxes, and other fees while the companies make a 2-cent profit for every premium dollar.
APCIA Vice President David Snyder stated, "Had unjustified premium cuts been ordered last year, it would simply have put additional upward pressure on rates this year because of the rapid increases in miles driven and the greater rate of crashes and losses.”
Like the CFA and CEJ, MAS Law strives to keep insurance companies accountable. Ultimately, the goal of an insurer is to maximize profits – paying you the full compensation amount is not in keeping with that aim. MAS Law will help you build a strong case that demonstrates the fault of the irresponsible driver as well as your need for compensation. We will give you advice on moving forward with hope and confidence. Contact us today to schedule your free personal injury case evaluation at (214) 634-2727.