Members of San Antonio-based USAA might get used to staying home if the company keeps this up.
With fewer drivers on the road during the coronavirus pandemic because of stay-at-home orders, USAA announced Thursday that its auto insurance customers will receive a 20 percent credit on another month’s worth of premiums. That works out to a $280 million benefit to members who had auto insurance policies as of Thursday.
The credit comes on top of another 20 percent credit on two months of premiums that USAA had announced April 8. That’s a $520 million benefit for those who had policies March 31. That dividend already is showing up in members’ accounts, the company said.
The benefit for all three months totals $800 million.
On ExpressNews.com: San Antonio-based USAA’s 2019 profit surges 75%
“During this time of uncertainty, we are proud to provide a second dividend to our auto policyholders,” USAA CEO and President Wayne Peacock said in a statement.
Crashes and auto insurance claims have plummeted since the spread of the virus as drivers have hunkered down.
Various insurance companies have responded by giving their customers credits on their monthly bills or refunds.
Among the bigger ones:
Geico intends to give back $2.5 billion to customers.
State Farm is returning $2 billion in dividends.
Allstate announced that it would return about $600 million.
The announcements came after two consumer groups sent letters to state insurance commissioners asking them to direct insurance carriers to offer customers “premium offset payments,” the Insurance Journal reported in March.
“The likelihood of a motor vehicle accident drops radically when the number of cars on the road drops radically,” J. Robert Hunter, director of insurance for the Consumer Federation, told the publication. “Consumers who paid auto insurance premiums based on driving an estimated 1,000 miles a month but who are now driving 200 miles a month because they are forced to work at home or their business has closed should get relief from their auto insurers.”
On ExpressNews.com: Get the latest update on coronavirus and a tracking map of U.S. cases
USAA members will automatically receive the additional dividend as a credit applied to their auto and property insurance account in late May. Members don’t need to take any action, the company said.
The dividend returns will go to more than 7 million USAA members with auto insurance.
Separately, the nation’s fifth-largest property and casualty insurer said it has provided financial relief to more than 620,000 members as as result of COVID-19. They include special payment arrangements and no fees or cancellations because of late payments through at least June 17.
USAA came under fire last month for keeping portions of stimulus checks — sent out by the federal government to provide a small financial cushion for recipients during the pandemic — that were deposited into customers’ accounts that were overdrawn or had negative balances.
On ExpressNews.com: USAA reverses course on seizing federal stimulus checks
The company quickly relented after the policy gained national attention.
USAA reported that its net income climbed $1.7 billion, or 75 percent, to $4 billion on $35.6 billion in revenue in 2019. Both income and revenue are records. It earned $2.3 billion on $31.4 billion in revenue in 2018.
USAA has more than 13 million customers, made up of current and former members of the military.
Patrick Danner is a San Antonio-based staff writer covering banking and civil courts. To read more from Patrick, become a subscriber. pdanner@express-news.net | Twitter: @AlamoPD
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