INSURERS ARE CUTTING PREMIUMS AS LESS DRIVING DURING COVID-19 CRISIS MEANS FEWER CLAIMS.

People laid off or working at home could get rebate

TORONTO • A number of Canadian insurers are reducing or rebating auto insurance premiums to compensate customers who are driving less because they are working at home or are self- isolating as a result of the coronavirus pandemic.

Aviva Canada said Wednesday it is offering $ 100 million in relief measures for drivers, including options to immediately reduce insurance premiums. Customers who have stopped driving entirely can reduce their auto insurance premiums by up to 75 per cent, the Toronto-based company said.

Allstate Insurance Company of Canada, Pembridge Insurance Company, and Pafco Insurance Company, meanwhile, said they plan to send one- time payments to qualifying customers by May in the amount of about 25 per cent of their monthly auto premium. The cumulative payments are expected to total $30 million.

Ryan Michel, chief executive of Allstate Canada, said his firm expects the reduction in driving will continue through April and into May as fewer people commute and many go out only for essential trips.

“We recognize that with fewer people driving, there are fewer collisions on our roads,” he said. “As a result we are giving … back to our customers. It’s simply the right thing to do.”

On Wednesday, the Insurance Bureau of Canada said that thousands of Canadians have already had their premiums deferred as a result of financial challenges stemming from the widespread shutdown of all- but- essential business across the country. In addition, a number of bureau’s members will be offering a reduction in premiums over the next 90 days to reflect the reduced risk from less driving, with IBC suggesting customers reach out to their insurance company to see whether they qualify for any relief.

“As it relates to savings on auto insurance premiums, savings will vary depending on individual driving habits,” the insurance bureau said in a statement.

IBC estimates that the total amount of relief on the way could reach $ 600 million.

On Tuesday, Montreal-based Desjardins said it would offer refunds of auto insurance premiums to personal and business clients who are driving less as a result of conditions imposed by the pandemic, such as working from home, losing their job, or self-isolating.

The refund “will be calculated over a three- month period and will reflect the client’s annual distance travelled, as declared on their insurance contract,” Desjardins said in a statement.

TD Insurance said Wednesday that it is allowing home and auto customers to have their premiums deferred by up to 90 days, and will be flexible about making “temporary premium adjustments to reflect changes in personal vehicle usage.”

The unit of Toronto- Dominion Bank, which has fielded more than 245,000 client calls since March 16, said it will also temporarily suspend cancellation of home and auto policies for nonpayment.

Property and casualty insurers in the United States, including American Family Insurance, and Illinois- based Allstate, announced earlier this week that they planned to reduce auto insurance premiums for clients who were driving less as a result of the pandemic.

Industry watchers say the rebates will have little impact on the insurance companies’ bottom lines, since less driving means fewer payouts for driving- related mishaps.

“The financial implications would be very minimal since all that is happening is sharing some upside from the fact that accident volumes are way down because of the lockdown,” said Meny Grauman, an institutional equity research analyst at Cormark Securities.

SAVINGS WILL VARY DEPENDING ON ... DRIVING HABITS.