Auto Insurance Premium Rebate May Be In the COVID-19 Cards

April 17, 2020, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

It appears that some car insurance companies in America are returning sizeable premiums to their clients as car driving has been drastically reduced nation wide. Allstate announced last week that it is returning $600 million in auto premiums to its customers. Most will get about 15% of their monthly premiums back in the next month or two.

Auto insurance companies are being pressured here and abroad to return the excess profits they will have made from auto insurance claims being dramatically reduced over the last month. It also from s part of the logic of many American States pressuring companies to honour COVID claims as part of business interruption insurance claims. President Trump himself addressed the issue this week on national television as the ‘fair thing to do’. He went on to say, “You have people that have never asked for business-interruption insurance, and they’ve been paying a lot of money for a lot of years for the privilege of having it,” Trump said at the briefing. “And then when they finally need it, the insurance company says, ‘We’re not going to give it.’ We can’t let that happen.”

In Ontario meanwhile, the provincial government will allow auto insurance companies to provide premium rebates due to the COVID-19 pandemic. This is a regulatory move to address the regulations which previously prohibited such rebates. The province has indicated it is eyeing the insurers carefully to see what move they make.

There is a great deal of pressure from the government on the insurance industry in Canada to begin paying out business interruption claims to companies on the verge of closing, as well as to rebate auto policy holders for the month that most people have hardly moved their cars except to get groceries once a week. There is public appetite for the payouts as well.

In the longer term there are expected to be many cases moving through the courts by businesses claiming COVID-19 related losses under their business insurance – business interruption insurance. Most people and companies pay into insurance with good faith on the assumption that when they have a genuine claim it will be honoured. We already know that with auto insurance and personal injury claims this is not the case. We will see how the courts go on to interpret business interruption insurance policy and their exclusion clauses moving forward.

About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

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