Ten Auto Insurers Hit With Class Action Lawsuits Over Excessive Rates Amid Pandemic

Consumers say ten major auto insurers failed to properly adjust their rates to account for less driving and fewer wrecks during pandemic lockdowns in multiple class action lawsuits filed earlier this week in Nevada.

The lead plaintiffs allege that, though some companies offered discounts during COVID-19 restrictions that kept many workers home and off the road, the move failed to account for the drastic lack of driving during these times. One of the lawsuits state that insurers failed to provide “any meaningful relief that actually reflects the reduction in cars on the road and reduced driving during the pandemic.”

“I believe that the rates should have been cut something in the order of 50-60%,” a lawyer representing plaintiffs in all the lawsuits said in a statement to The Associated Press. “These discounts that were given, were just totally woefully inadequate.”

The class action lawsuits were filed against State Farm, USAA, Geico, Acuity, Liberty Mutual, Farmers, Progressive, Travelers, Nationwide and Allstate.

The lawsuits point out that pandemic lockdowns led to a decline in traffic and auto accidents starting in the spring of 2020. Some auto insurers offered a variety of discounts to reflect the changed conditions, from a one-time refund of $50 to $100 or temporary bill reductions. However, the plaintiffs argue that insurance companies’ discounts did not accurately account for  the dramatic reduction in car accidents and as a result the companies experienced windfall profits.

The class action lawsuits say these savings auto insurers experienced during pandemic lockdowns should be passed on as lower rates to policyholders, along with damages.

Auto Insurers Respond to Class Action Lawsuits

A spokesperson for USAA told the Associated Press that the company was reviewing the lawsuit.

“I do think it’s important to note that on three occasions in 2020, USAA returned dividends totaling $1.07 billion to all auto insurance policy holders due to fewer drivers on the road because of the ongoing pandemic,” he told reporters.

“The filing of a lawsuit does not substantiate the allegations within the complaint,” State Farm reportedly said in a statement issued after the allegations were lodged. “We’ve recently learned about the filing, and it is premature to comment at this time.”

“Nationwide is taking the longer view while continuing to monitor consumer driving behaviors and how they impact future miles driven and accident frequencies,” the insurance company said in a statement issued Wednesday. “We know customers want fair rates and agents are seeking stability.”

Liberty Mutual declined to comment and other companies had not returned requests for comments, reports AP News.

Do you think you paid excessive rates to your auto insurance company during pandemic lockdowns? Tell us about it in the comment section below!

The lead plaintiffs in all the class action lawsuits are represented by Robert Eglet of Eglet Adams.

Read About More Class Action Lawsuits & Class Action Settlements:

• Should Auto Insurance Premiums Be Refunded Due to COVID-19?
• Coronavirus Car Insurance Refunds: What You Need to Know
• COVID-19 Allstate, Geico, Progressive Car Insurance Lawsuits Seek Reduced Premiums
• Coronavirus Business Interruption Insurance Lawsuit Investigation