By Leslie Scism
The nation’s biggest car insurer, State Farm Mutual Automobile Insurance Co., is slashing $2 billion of premiums owed on 40 million vehicles, making it the latest carrier to offer a financial-relief program for consumers as auto claims have plunged under shelter-at-home restrictions.
State Farm’s total brings the amount pledged by the top 10 sellers of personal car insurance to more than $7 billion as U.S. carriers are beginning to experience a financial windfall tied to Americans parking their cars to help fight COVID-19, the disease caused by the novel coronavirus.
State Farm’s program, which will benefit approximately 21 million households, is on the high end of the relief being provided in consumer programs launched so far. The “Good Neighbor Relief Program” offers a 25% policy credit on premiums due from March 20 through May 31, or about $20 a month for each vehicle insured. The average annual State Farm auto premium is approximately $950 a year, the insurer said.
The big car insurers have announced their initiatives in a flurry this week. Allstate Corp. /zigman2/quotes/201974803/composite ALL -0.33% and American Family Mutual Insurance Co. on Monday launched money-back programs that put a spotlight on what was quietly developing into bad optics for the industry: outsize profits as many policyholders struggle financially.
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