April 7 (UPI) -- Two major U.S. auto insurance providers say they will refund premiums to customers who are driving far less frequently due to coronavirus restrictions.
With more than 300 million Americans in 41 states affected by orders to stay home, Allstate and American Family Insurance have announced they will reimburse a portion of customers' premiums to reflect a decline in accident rates.
Chicago-based Allstate said its "Shelter-in-Place Payback" will include more than $600 million to be distributed over the next two months.
"This is fair because less driving means fewer accidents," said Allstate Chairman and CEO Tom Wilson.
Allstate said most customers will be refunded 15 percent of their monthly premium in April and May.
American Family said it will return $200 million in the form of a one-time full payment of $50 per covered vehicle, per policy.
The company said it expects to send out all 2.3 million checks within 60 days, beginning with customers in Wisconsin, where American Family is based.
The Consumer Federation of America and Center for Economic Justice "applauded" the moves.
"Allstate and American Family deserve praise for their industry leadership on this vital first step," said J. Robert Hunter, CFA's Director of Insurance and former Texas Insurance Commissioner. "While it's too early to tell if the amounts promised are enough to reflect the big drop in auto accidents, the actions ... are the right thing to do to help policyholders beleaguered by COVID-19 restrictions and job loss.
"We urge other insurers to take similar actions quickly."