{"id":996,"date":"2021-01-21T23:44:24","date_gmt":"2021-01-21T23:44:24","guid":{"rendered":"http:\/\/localhost\/2015\/07\/26\/the-chance-to-spend-levy-completely-a-bad-thing-or-boon\/"},"modified":"2021-02-04T14:25:47","modified_gmt":"2021-02-04T14:25:47","slug":"the-chance-to-spend-levy-completely-a-bad-thing-or-boon","status":"publish","type":"post","link":"http:\/\/www.cheappolicy.us\/?p=996","title":{"rendered":"Should car insurance cost less as drivers stay home because of coronavirus? Consumer groups say yes."},"content":{"rendered":"

Coronavirus in New Jersey<\/a> means millions of people are at home, either working at home,<\/a> shut out of their jobs, or caring for the kids.<\/p>\n

That means fewer commuters are in cars and buses to get to work. Virtual learning means no school buses.<\/p>\n

Roads aren\u2019t empty, but there is not a lot of traffic.<\/p>\n

There may be a major drop in accidents.<\/p>\n

So while drivers\u2019 cars sit in their driveways, should car insurance companies lower premiums and give some financial relief to families struggling because of coronavirus?<\/p>\n

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Consumer groups say yes.<\/p>\n

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\u201cWithout a return of premium to the millions of Americans who are sheltering in place<\/a> or have otherwise significantly reduced their driving, consumers will be paying unreasonable and excessive premiums based on outdated estimates of miles driven,\u201d The Consumer Federation of America (CFA)<\/a> and the Center for Economic Justice (CEJ)<\/a> said in a letter<\/a> to the nation\u2019s state insurance commissioners.<\/p>\n

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The groups are asking the insurance commissioners to direct insurers to lower premiums as the coronavirus crisis plays out.<\/p>\n

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When car insurance companies set premiums, the number of miles driven is part of the calculation. So if people aren\u2019t driving as much anymore, they\u2019re paying too much, the groups said.<\/p>\n

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\u201cThe likelihood of a motor vehicle accident drops radically when the number of cars on the road drops radically,\u201d said J. Robert Hunter, Director of Insurance for CFA. \u201cConsumers who paid auto insurance premiums based on driving an estimated 1,000 miles a month but who are now driving 200 miles a month because they are forced to work at home or their business has closed should get relief from their auto insurers.\u201d<\/p>\n

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Will consumers see lower car insurance premiums?<\/p>\n

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It\u2019s too soon to tell as federal and state governments work on multiple relief packages.<\/p>\n

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The state insurance commissioners \u2014 collectively known as the National Association of Insurance Commissioners (NAIC<\/a>) \u2014 said state regulators \u201cwelcome the input of all stakeholders on emerging issues that should be addressed once we have moved past this initial critical phase of the outbreak,\u201d noting the health and safety of consumers is the group\u2019s most important consideration.<\/p>\n

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New Jersey\u2019s Division of Banking and Insurance (DOBI) didn\u2019t respond to a request for comment.<\/p>\n

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Neither did Allstate,<\/a> Liberty Mutual,<\/a> or NJM<\/a>.<\/p>\n

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State Farm and Farmers Insurance didn\u2019t comment but said we should contact the Insurance Information Institute (III), an industry group that\u2019s funded by insurance companies and works with consumer education but does not lobby for insurers.<\/p>\n

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III spokesman Michael Barry said the insurers will listen to whatever the state insurance regulators instruct them to do.<\/p>\n

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\u201cHowever, it\u2019s way too early in this crisis to start qualifying whatever drop in miles drivers we will see nationwide,\u201d Barry said.<\/p>\n

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Plus, he said, miles driven is one of the dozens of factors that go into the pricing of auto insurance.<\/p>\n

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\u201cJust because the mileage goes down, it doesn\u2019t mean other risks automatically go away,\u201d Barry said.<\/p>\n

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He said some consumers already have mileage discounts, using so-called telematics products that plug into a car and monitor speeding, shortstops, and other driver actions. Drivers deemed to have good habits are eligible for discounts with some insurers.<\/p>\n

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\u201cIt\u2019s just way too soon to know what this will mean,\u201d Barry said.<\/p>\n

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Progressive asked the American Property Casualty Insurance Association (APCIA) to respond on its behalf.<\/p>\n

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Robert Hartwig, a technical advisor to APCIA, said auto insurance rates are established using multiple years\u2019 worth of data so they adjust gradually, in both an upward and downward direction.<\/p>\n

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\u201cTo the extent that there is a sustained decline in auto claim frequency, rates will be adjusted accordingly,\u201d Hartwig said.<\/p>\n

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He said during the financial crisis and slow recovery afterward, rates fell or were flat in most states over a span of years. Personal auto insurers premiums written across all 50 states actually declined from $160.5 billion in 2006 to $157.2 billion in 2009 and did not exceed pre-crisis levels until 2011, he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Coronavirus in New Jersey means millions of people are at home, either working at home, shut out of their jobs, or caring for the kids. That means fewer commuters are in cars and buses to get to work. Virtual learning means no school buses. Roads aren\u2019t empty, but there is not a lot of traffic. […]<\/p>\n","protected":false},"author":1,"featured_media":1098,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/posts\/996"}],"collection":[{"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=996"}],"version-history":[{"count":2,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/posts\/996\/revisions"}],"predecessor-version":[{"id":1099,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/posts\/996\/revisions\/1099"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=\/wp\/v2\/media\/1098"}],"wp:attachment":[{"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=996"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.cheappolicy.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}