Home and auto insurers are set to pay out millions of dollars in car insurance rebates for Canadian customers, regardless of their financial situation, during the outbreak of COVID-19.
Allstate Insurance Co. of Canada, together with subsidiaries Pembridge Insurance Co. and Pafco Insurance Co., announced on Wednesday a “stay at home payment” of more than $30-million to help their personal auto insurance customers.
Allstate, Pembridge and Pafco customers who have active automobile policies as of April 8 will qualify to receive a one-time payment of approximately 25 per cent of their monthly auto premium. Rebate cheques will be mailed out in May.
“The payment is to help relieve the restrictions, changing business practices and financial burden imposed on our customers," Ryan Michel, chief executive officer of Allstate Insurance Co. of Canada, said in a statement. “We’ve seen less driving, for example, and this is expected to continue throughout April and into May. We recognize that with fewer people driving, there are fewer collisions on our roads.”
Now, with a reduction in risk for auto insurers with fewer cars on the road, savings are being put back into the pockets of consumers.
Also on Wednesday, Aviva Canada Inc. introduced immediate relief measures of about $100-million for auto customers who are driving less during the COVID-19 outbreak. Aviva customers who have stopped driving entirely can reduce their auto insurance premiums by up to 75 per cent, the company said. For policyholders who still have to drive during the pandemic, but are driving less, premium reductions may also be available.
Two Quebec-based insurers – La Capitale Insurance and Financial Services and L’Unique General Insurance Inc. – have also introduced rebates, equal to 20 per cent of their monthly premium effective from April 1, for all auto insurance clients. The companies said the rebate will cover the whole confinement period.
“By giving the rebate to everyone instead of only those who are using their vehicle less, L’Unique is also allowing seniors, as well as essential workers, to benefit," Yves Gagnon, chief operating officer of L’Unique General Insurance, said in a statement. “We don’t think it would be fair if those who are saving lives or are working so that our society continues to function didn’t benefit from this rebate as well.”
Last week, several Canadian property and casualty insurers – including Allstate – began to individually roll out relief measures for clients who were experiencing financial hardships because of COVID-19, including payment deferrals, premium adjustments and waiving fees on missed payments.
The Insurance Bureau of Canada, a national agency that represents home and auto insurers, announced on Wednesday that its 74 insurance company members are now joining forces in offering reductions in auto insurance premiums for consumers whose driving habits have changed “significantly" – a decline in fees it said could result in $600-million in savings to consumers.
In addition to adjusting premiums for drivers, IBC companies also jointly agreed to eliminate all non-sufficient funds fees that may occur on payments during the pandemic, implement 90-day payment deferrals and offer flexible payment options for certain vulnerable clients or those facing financial hardships. Insurers said consumers temporarily using their car or homes differently (for example, using a car to commute to work instead of taking public transit or, alternatively, working from home) will not face changes to their auto or property premiums or their ability to make a claim.
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