With many New Jerseyans and Americans still slated to stay off the road as the COVID-19 pandemic drags on, insurance giant NJM Insurance Group said it will refund $27.7 million to its car insurance customers.
The West Trenton-based insurance group’s move means that customers will see a refund totaling 15 percent of what they paid for the past two months combined, the insurance company said. And it’s on top of another $41.7 million that NJM refunded in April.
“As coronavirus-related conditions continue to restrict activity across the region, many NJM policyholders continue to limit their driving. In recognition of this, the extended program will now provide a total of five months of relief,” NJM said in a Monday morning statement.
That move comes as gas demand reached its highest levels since the global pandemic slammed into the nation in March over the July Fourth weekend, according to trade group American Automobile Association.
Another study by AAA projected that Americans will make 707 million trips this year, be it by car, train or air—still nearly 15 percent lower than last year.
“Americans will get out and explore this summer though they’re taking a ‘wait and see approach’ when it comes to booking and are likely to book more long weekend getaways than extended vacations,” Paula Twidale, AAA’s senior vice president of travel, said in the June study.
In April, with tens of millions of Americans stuck inside amidt stay-at-home orders and most brick and mortar shops closed down, many auto insurance companies argued that fewer cars on the road should translate to lower premiums for customers.
A report that month from the Consumer Federation of American found that many of the nation’s largest insurers refunded a combined $6.5 billion to their customers.
“[M]any insurance companies … have recognized that they cannot sit on policyholder premium while their customers sit at home,” J. Robert Hunter, director of insurance for CFA, said in the April report.
USAA said in March that it would refund $520 million to its car insurance customers, via a 20 percent credit on two months of premiums. And Geico said it would give a 15 percent credit for policies renewed between April 8 through Oct. 7 this year.
“Even as states reopen, we continue to see the effects of the pandemic on our customers’ lives,” said NJM President and Chief Executive Officer Mitch Livingston said on Monday, adding that the move “considers our policyholders’ reduced driving as they do their part to keep their family, friends, and communities safe.”
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