For Immediate Release: Wednesday, August 19, 2020
ROCKVILLE, Md., Aug. 19, 2020—Yesterday Council Vice President Tom Hucker, who chairs the Council’s Transportation and Environment Committee, sent a letter to the Maryland Insurance Administration urging it to direct auto insurance companies to give back premium refunds to consumers. Refunding this money would help ensure that insurance rates are fair, as many drivers’ annual mileage, on which premiums are based, has fallen dramatically due to the COVID-19 pandemic. Further, it would provide needed economic relief to Maryland households experiencing financial hardship due to COVID-19.
Council Vice President Hucker said: “As a result of COVID-19, the annual mileage on which auto insurance premiums are based has dropped substantially, and crashes and insurance claims are down as well. The state needs to ensure that consumers are not overcharged or paying excessive rates. I urge the Maryland Insurance Administration to protect the interest of policy holders by making sure auto insurance companies refund an appropriate portion of their premiums.”
Doug Heller, Consumer Federation of America, said: “Unfortunately, most insurance companies seem to think they did enough by giving refunds for two or three months this spring. But this pandemic persists in Maryland and much of the country. The same reasons that made premium refunds necessary in the spring are still here; consumers need Commissioner Birrane to require that auto insurers provide adequate relief.”
The letter notes that the Consumer Federation of America (CFA) called on insurers earlier this year to refund some of their premiums. In response, most auto insurers announced premium relief for their consumers for at least a couple of months. CFA issued a report card grading the insurers; the most common refund was 15 percent of premiums for two months. Some companies offered between 20 and 30 percent refunds of premiums, while others offered smaller percentages or provided no relief at all. Several major insurers have announced extensions of premium relief, but most insurers have not. The letter further notes that four states—California, Michigan, New Jersey and New Mexico—have made premium refunds to residents mandatory.
You can read the full text of Councilmember Hucker’s letter here.
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Release ID: 20-352