ALBANY — Want to save some money on your auto insurance? You may not have to do anything at all since more than a dozen major carriers are moving to lower their rates amid the COVID-19 pandemic.
New Yorkers could see savings of 10 to 25 percent in their next bills, assuming the state bureaucracy and insurance companies can alter the bills in time.
“Simple math says that if you’re driving less – or not driving at all – liability will be reduced,” Hudson Valley Democratic Assemblyman Kevin Cahill said.
“If you are not driving your car there is less risk associated with it,” he added.
“The idea is to put money back into the pockets of people who need it right now.”
Cahill, who chairs the Assembly insurance committee along with fellow Democrat, Capital Region Sen. Neil Breslin, chair of the senate insurance committee, and with Long Island GOP Sen. Andrew Garbarino, this week urged the state Department of Financial Services to expedite approval of the requested rate reductions.
Breslin added that insurance companies have been saving large amounts by having fewer claims to pay since the state went on lockdown.
While insurance companies need DFS approval for rate increases, they also need permission to lower their rates.
“Several New York insurers have been waiting for a significant period of time for permission to return funds to their customers,” said Cahill.
He did add that DFS has been working overtime to deal with health insurance questions and issues that have arisen from the pandemic. But now they should turn to auto rates as well, since auto insurance companies started asking for permission to lower rates earlier in the month.
DFS officials say they should have the approvals ready this week.
“DFS has worked expeditiously to place the New York State-regulated insurers in a position to obtain accelerated filing approvals and has now begun approving the corrected filings,” the agency said in a prepared statement.
“We anticipate that any uncorrected current filings could be approved this week.”
Statistics appear to back up the idea that, with so many people home, auto accidents are down.
State Police reported 30 percent fewer crashes in March 2020 compared to 2019, according to the Associated Press.
And the Consumer Federation of America estimates that traffic across New York State is down 65 percent due to the pandemic. That number rises to an estimated 85 percent in New York City, added Doug Heller, who follows insurance issues for the Federation.
Garbarino noted that auto rates went up on Long Island following Superstorm Sandy since the cost was based on the area’s overall experience, known as community rating.
“Now, with cars in garages, the Long Island Expressway nearly empty, our businesses reduced to a trickle and everyone who can is staying home, it is time to recognize this experience and reduce the rates,” he said.
State Farm, Progressive, Nationwide, USAA, Allstate, Geico, and Liberty Mutual are among the companies looking to lower rates.
According to the Insurance Information Institute, companies are instituting about $10.5 billion in reductions nationwide. All but one of the Top 15 insurors have agreed to reductions, said Heller.
The reductions can come in the form of rebates, or lower premiums in coming months.
There may be a bit of enlightened self-interest in the reductions as well.
A 2019 report by the J.D. Power survey company found that fewer people are entering the auto insurance market and those with insurance are increasingly shopping around for the best price.
“Insurers have only one option when it comes to growing their business: taking market share from competitors,” the survey concluded. They found that the rate at which customers switched companies rose from 31% to 35% in 2019. Of those who were shopping around, 64 percent cited the price.
Last year, New York State had the 10th highest auto insurance rate in the nation, with a statewide annual average rate of $1,688, although that included New York City’s cost of $2,392, according to The Zebra, a price comparison website. That was up 22 percent since 2014.
The Consumer Federation in a 2015 survey had New York with the second highest rates overall, behind New Jersey.
Heller noted that New York is among a handful of states that allow insurers to raise or lower rates about 5 percent without prior approval. The ability to keep instituting those modest raises can cause the rates to rise steadily over time.
He added that one state, California, has mandated that auto insurance carriers provide rebates or discounts. To not do so, Heller said, insurance companies would be reaping a “coronavirus windfall.”
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