Home and auto insurers offer economic relief during COVID-19 pandemic

Home and auto insurers are joining Canada’s big banks in offering customers economic relief during the outbreak of COVID-19.

Last week, Intact Financial Corp. was one of the first property and casualty insurance companies to announce that clients experiencing financial hardships may qualify for relief measures such as payment deferrals, premium adjustments or the waiving of missed payment fees.

The company, which sells polices through its Intact and belairdirect brands, said the measures will be in place until the end of April and will focus on individuals and businesses who have been “significantly impacted” by the novel coronavirus, including people who are ill, elderly or have experienced job loss.

As well, the company is adjusting its risk profile for customers, which might lead to “premium relief,” chief executive Charles Brindamour said during an online discussion with analysts.

“[If] you don’t drive to work, if sales in your businesses are down dramatically, if you’re parking fleet and so on, we’ll adjust your risk profile to make sure that we take into account this environment,” he said.

Intact’s relief measures come at a time when many Canadians are suffering financial hardships as the COVID-19 outbreak continues to force company shutdowns across the country. More than two million have applied for employment insurance since March 15, while others are beginning the application process this week for the new Canada Emergency Response Benefit.

The banking sector was quick to respond to the crisis last month with relief plans for personal and small business banking customers. All of Canada’s Big Six banks announced six-month mortgage payment deferral programs, and the opportunity for relief on other credit products such as loans.

But unlike the banks, which jointly released information on mortgage payment deferrals, the home and auto insurance sector appears to be a mixed bag when it comes to what consumers can expect in relief. Canada has about 195 home and auto insurance providers, which creates a more fragmented environment.

On March 19 – two days after the banks’ mortgage relief announcement – the Insurance Bureau of Canada (IBC), a national industry association representing private home, auto and business insurers, released a statement telling consumers they should address any payment concerns directly to their insurance company.

“[Consumers who] are concerned about their ability to pay their premiums due to the impact of COVID-19 should contact their insurance representative to discuss a potential solution,” said Don Forgeron, president and CEO of IBC.

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The IBC did not provide details about what “potential solutions” the industry would consider, saying “no two policies are identical.”

Co-operators Group Ltd. declined to comment on the specific relief measures offered to clients, saying it is addressing clients’ needs "on a case-by-case basis.”

Allstate Insurance Co. of Canada confirmed with The Globe and Mail that it has introduced payment deferrals to certain clients as a result of the pandemic. It is also looking at waiving non-sufficient-funds fees, providing coverage extension, and adjusting coverage to reflect a change in usage by the policyholder.

Both Allstate and Desjardins Insurance are providing temporary additional coverage for clients who are using their personal vehicles to deliver meals, groceries or prescription drugs during the pandemic at no extra charge.

Desjardins is also considering payment deferrals on a case-by-case basis for its home and auto policyholders. In addition, Desjardins has automatically raised the coverage limit for personal equipment used for professional purposes to $10,000 from $5,000 on all home insurance policies, as more people are working from home.

With more clients at home and driving less, Desjardins announced on Monday it is offering discounts on auto premiums to clients whose commuting habits have “significantly changed” and who are only using their vehicles for essential trips to such places as the pharmacy or grocery store.

TD Insurance is offering a variety of financial relief to those who have been financially affected by this pandemic, including premium deferrals, spokesperson Paolo Pasquini said. Other relief measures TD has implemented include waiving cancellation fees on existing policies, reinstating customers’ policies in the event of a cancellation because of non-payment and minimizing coverage disruption on vacant homes.

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