Insurance Refunds:
According to III, lockdowns led to a 40.2% decrease in miles driven, prompting auto insurance companies to refund 15%-25% of premiums, totaling $14 billion.Fewer Claims:
Reduced road traffic during COVID-19 resulted in fewer car accidents, leading to a decline in insurance claims and compensations, as reported by Insurance Business.Popularity of Usage-Based Insurance
A recent industry survey noted that changes in driving habits increased the popularity of usage-based insurance, which allows policyholders to lower rates based on personal driving behaviors.Reduced Road Traffic
Lockdowns and remote work practices significantly reduced road traffic, decreasing total mileage by up to 60%, leading to lowered risk for insurance companies and potential premium reductions.Changing Consumer Behavior
The pandemic has altered consumer behaviors, affecting Gen Zers' purchasing power and car buying intent, potentially impacting insurers' income from premiums, per Urban Institute and McKinsey.Continued Financial Impacts
Ongoing pandemic uncertainties leave the auto insurance industry vulnerable to financial impacts, including decreased car purchasing intent and potential future shutdowns.