American Insurance Association issued the following announcement on April 4.
David A. Sampson, president and CEO of the American Property Casualty Insurance Association (APCIA) issued the following statement:
“The Consumer Federation of America used misguided logic and their public relations pitch misses the mark on many angles. Insurance rates are responsive to changes in the number and costs of claims. Rates are continuously adjusted at each policyholder’s renewal. It is also important to understand that rates are established using multiple years’ data, which means they adjust gradually, in both an upward and downward direction. If there is a sustained decline in number and cost of insurance claims, rates will be adjusted.
“The CFA does not mention that the cost of claims also has been increasing. That means that a decline in the frequency of crashes could be offset by the increasing costs of technology in vehicle parts, auto body repair, medical care, and lawsuit abuse.
“Regulators and insurers are working to strike the right balance on expanding temporary arrangements to provide immediate relief for those policyholders impacted by COVID. Now is not the time for arbitrary and artificial calls for national rate decisions. We urge all stakeholders to support flexibility in the marketplace.
“There are a number of ways that auto insurers are currently helping customers manage costs. During this extraordinary crisis, many companies are voluntarily offering arrangements for:
Flexible payment solutions for families, individuals, and businesses—providing additional time to make payments;
Waiving insurance premium late fees for families, individuals, and businesses;
Pausing cancellation of coverage for personal and commercial lines due to non-payment and policy expiration, which includes personal auto, commercial auto, homeowners, business owners, renters, boat, motorcycle, condo, mobile home, personal umbrella, and landlord.
Suspending personal auto exclusions for restaurant employees who are transitioning to meal delivery services using their personal auto policy as coverage;
Adding more online account and claims services for policyholders;
Shifting more resources to anti-fraud and cyber security units, in recognition of the bad actors who will prey on victims during times of crisis; and
Adopting new technologies and remote solutions to minimize any interruptions in service, collision repair, and claims handling, such as using virtual inspection technology to complete damage inspections.
“Those individuals going through extraordinary life circumstances should call their insurer to discuss their options. Today, 21 states have additional consumer protection laws to address insurance scores that could be impacted by changes in credit scores. In addition, some insurers have pioneered pay-as-you-go auto insurance through new technology solutions.”
Original source can be found here.
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