Insurance companies should consider offering lower premiums and refunds for car, travel and business insurance in light of the COVID-19 emergency.
Two major car insurance companies in the United States have already offered refunds as a result of reduced activity and claims.
Clearly there are fewer vehicles on the road and the risk of accidents and consequent claims has fallen dramatically.
The same applies to those who have taken out travel insurance who won’t be going abroad for holidays or business in the current circumstances.
Businesses should also see some recompense with so many of them closed under the current restrictions. Insurance costs for business are particularly high. Many struggle to pay them when margins are tight. With a complete shutdown for some companies, refunds should be considered as a matter of urgency.
Insurance companies in the United States have already acted in this regard. The fourth biggest car insurer Allstate has said it will give back more than €500 million, while American Family Mutual is refunding nearly €200 million in cheques to customers.
For Allstate, quarantined drivers will receive refunds, while premiums for April and May will be cut by 15%.
There is no reason why Irish insurers should not follow suit.
They should recognise that people are driving less and the roads are much quieter.
People who are already paying for the high cost of insurance should see some benefit from the reduced risk. The same principle applies to business travel, holiday insurance and the insurance costs for running businesses that are temporarily closed.