Accidents Down, Profits Up as Auto Insurers Cash-In on COVID

While the COVID-19 pandemic has meant a decrease in overall automobile traffic nationwide and an attendant decrease in car accidents, auto insurers are raking in record profits. This despite repeated calls from consumer advocates and some regulators to return a portion of the windfall to the very consumers who need it most — those not driving.

Auto crashes remain low according to new accident data published by the Consumer Federation of America (CFA) and the Center for Economic Justice (CEJ). The groups said that ongoing reduction in pandemic-driven crashes should lead to a new set of refunds for auto insurance customers. The staggering drop in accidents this year resulted in a dramatic drop in claims paid by insurers, handing companies massive windfall profits even after accounting for the woefully inadequate premium relief provided in the spring. The groups sent a letter today to the nation’s insurance commissioners calling for action on refunds.

Data collected by the groups from four states — Colorado, Maryland, Massachusetts, and Texas — representing different population densities and responses to COVID-19 show over 181,000 fewer accidents in those states during the pandemic than during the same period in 2019. This includes a decline of more than 83,000 accidents after May, when most insurers stopped providing refunds and premium credits. With the exception of California, where Insurance Commissioner Ricardo Lara ordered insurers to continue issuing refunds through the summer…