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Millions of drivers received refunds on car insurance after the pandemic hit, but those rates may rise

Millions of drivers received refunds on car insurance after the pandemic hit, but those rates may rise
Posted at 1:20 PM, Sep 11, 2020
and last updated 2020-09-11 13:20:39-04

PINELLAS COUNTY, Fla. — Millions of drivers received refunds on their car insurance after the pandemic forced a national shutdown. But the I-Team found out at least one major insurance carrier is asking to raise rates for drivers across Florida.

Pinellas County resident Robert Stickler and his wife started working from home after the pandemic shut down Florida in March.

“My family hasn't been driving, the cars have been sitting," Stickler said.

Their insurance carrier Geico and many other large auto insurers in the nation refunded drivers. The Sticklers were refunded 15 to 20 percent of premium costs after the pandemic delivered a drastic dip in accidents and claims. That credit was reflected on the Stickler family bill.

Robert Stickler welcomed the refund but said they suffered sticker shock when Geico socked them with a $300 rate hike to their 6-month policy in June. The increase was approved by the state.

“It was going to be over $714 a month for 3 older vehicles,” said Stickler.

In a letter from Geico:

"There are many factors that affect your insurance premium such as age, driving history, location and the increasing cost of vehicle repairs."

But this driver says that explanation does not add up.

“There had been no changes what-so-ever,” said Stickler.

We reached out to Geico and have yet to hear back. The I-Team checked state records and found Geico petitioned the Florida Office of Insurance regulation between March and August for a separate rate hike of nearly 7 percent after the pandemic hit.

Doug Heller is with the Consumer Federation of America, a watchdog group that called on Geico this past May to give back some of its profits the CFA claims the company raked in during the pandemic as drivers stayed off the road.

“We are paying premiums as if the pandemic never happened,” said Heller.

The I-Team reviewed second-quarter profit earnings for some of the nation’s largest insurance companies. We looked at overall profits which include their auto insurance and found Allstate, Progressive and Geico business shot up by hundreds of millions of dollars for the second quarter of this year compared to the second quarter of 2019.

Geico's parent company reported to investors its 2020 overall insurance profits were, ”...largely attributable to unusually high earnings from Geico due to lower claims frequencies. These results are likely to be temporary…"

Former Florida Deputy Insurance Commissioner Lisa Miller says there’s a state law that regulates how much insurance can profit.

“We have very strict set of factors of what these insurance companies can profit," Miller said.

No one is alleging that Geico or any other insurance company made an excessive profit. However, Miller says if state regulators find that any auto carrier made an excessive profit, customers could be refunded under a Florida law meant to protect consumers.

The I-Team requested an interview with Florida's Insurance Commissioner David Altmaier. His spokesperson declined our request but said in a statement.

"OIR thoroughly reviews all filed auto insurance rates filings to ensure they comply with all applicable laws and are not excessive, inadequate, or unfairly discriminatory. "

In its latest earnings report. Allstate credited its auto policy profits to "....Higher premiums earned and lower loss costs from reduced miles driven.”

We asked the company if it planned to refund more money to customers, but have yet to hear back. Progressive told us it filed in June to reduce premiums in 35 states including Florida.

Geico’s rate hike request is still pending. We plan to keep following that and let you know how it could affect your bills

This story originally reported by Jackie Callaway on abcactionnews.com.