By Amir Sadiq
With COVID-19 driving down automobile activity, auto insurers in Texas could reap a windfall estimated between $606m and $869m, according to non-profit organisation Texas Appleseed (Appleseed).
The organisation’s research has found that since March, weekly accidents in Texas declined by an average of 43%. However, about a third of the top 40 auto insurers in Texas have not offered any credit or refund to customers despite the drop in travel and accidents.
Texas auto insurers are required to base pricing on risk of losses due to claims. New data documenting their varied responses to the pandemic call into question whether all insurers are following state law,” said Appleseed in a brief.
It also found that most of the insurers not offering any rebates are serving higher-risk drivers or drivers with no credit or low credit scores. In addition, some companies are offering discount only upon renewal, which undermines fair market competition.
Appleseed has asked the Texas Department of Insurance to take action and ensure that auto insurers are adopting fair credit and refund policies in compliance with state law.
The organisation is not alone in calling for action to be taken, with similar requests having been submitted by AARP Texas, the Consumer Federation of America, the Center for Economic Justice, and Texas Watch.
Asia Insurance Review