San Antonio-based USAA joined other major auto insurers on Wednesday in announcing refunds to policyholders as people are driving less due to coronavirus-related stay-home orders.
USAA plans to give insureds a 20 percent credit on two months of premiums in the coming weeks for a total of $520 million, a statement from the property and casualty insurer said. The credit reflects the fact that USAA members are driving less, leading to fewer accidents.
Policyholders will receive a credit applied to their bill, said a spokesman, and will be notified by letter or an email.
On Monday, Allstate, the nation’s fourth-largest auto insurer, announced it would refund 15 percent of monthly premiums for April and May, returning a total of $600 million, and American Family Insurance also said it would make a one-time repayment of $50 for each vehicle on its policies.
Leading insurer Geico also has announced a 15-percent premium reduction, while State Farm, the largest provider of auto insurance in the U.S., advised policyholders facing financial hardship to contact an agent.
USAA, a $31 billion financial services company that primarily serves military members and their families, reported more than $22 billion in net insurance premiums in 2018. The company annually returns a portion of profits to its members, and last year paid out $2.4 billion in dividends, distributions, and bank rebates and rewards.
“We understand the impact this pandemic is having on our country, and especially our military community and their families, many of whom also are working on the front lines of the crisis,” stated Wayne Peacock USAA president and CEO. “Returning premiums provides timely help for our members.”
In March, USAA established payment arrangements to assist members experiencing financial difficulties and said it would not cancel members’ insurance policies or charge fees due to late payments on USAA auto and property insurance coverage through June 17.
USAA also expanded auto insurance coverage for members who use their personal vehicles to deliver food, medicine, and other goods for commercial purposes.
The company has extended payment options and discounts for USAA Bank customers, and for life insurance policyholders and investors.
To comply with stay-home and social distancing mandates, nearly all of USAA’s 35,000-member workforce is working from home. In recent weeks, USAA has donated $4.4 million to nonprofits and other organizations responding to the pandemic crisis.
