COVID-19 Update: How We Are Serving and Protecting Our Clients

Insurance Giants Face Lawsuit over Pandemic Rates

 

Famous auto insurance giants are being sued by policyholders for providing insufficient financial relief to motorists during the pandemic. Among those accused include: Allstate, Geico, Progressive, Erie Insurance, American Family Insurance, and The Travelers Company. These well-known insurers are currently facing major allegations by Illinois residents for their inappropriate rebates to financially unstable clients.

During the height of the pandemic, companies issued policies for their employees to work remotely from home. As stated in the lawsuits, miles driven by motorists dropped by almost two-thirds during the spring. In addition, the U.S. Bureau of Labor Statistics confirms that the rate of unemployment rose to 14.7% in April 2020. Previously, the rate was 10.3%, which they claim is the highest rate increase in the history of their data records. At this time, the statistics from the United States Department of Labor show that the number of people who were unemployed increased from 15.9 million to 23.1 million. Also, the governor of Illinois, J. B. Pritzker, announced that residents should stay at home to reduce exposure to COVID-19. As a result, people did not have to use their vehicles as often as they previously did.

However, insurance companies did not reduce premiums or rates during the pandemic. Now, multiple lawsuits are emerging against the insurers. In an Illinois Cook County Circuit Court, people protested that high rates have greatly affected their financial status. Although some of the alleged insurers offered some support to customers, it was not a significant amount that would cause the policyholders to drop the case. Clients state that a community State Farm offered its customers a 25% credit during March 20 to May 31 of this year. In contrast, a local Allstate in Northbrook offered a 15% credit for April, May, and June. Consequentially, the lawsuits accuse the companies responsible to be in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The legislation protects consumers, borrowers, and business workers against fraud or deceptive actions in trade or business activities. As stated in the lawsuits, the clients expect that as long as the disease continues to spread, the abnormal amount of rebates will pursue.

Other auto insurance corporations have provided substantial relief for Americans during the pandemic. As explained by the Insurance Information Institute, companies have offered more than 14 billion dollars in premium refunds and credits in total. A few insurers are also giving a percentage of paybacks on monthly premiums to their clients. A majority of companies continue to update their policies and rebates as time goes on during the pandemic. It is recommended that clients remain in contact with their insurance company during this time to stay informed of any new changes or inclusions on their car insurance.

According to one of the attorneys currently handling the case, thousands of clients can join in the case as well. If the claims are given class-action status, the lawsuits can involve all policyholders in Illinois that have had one of the reported insurance franchises in March. Policyholders are hoping that the case turns in their favor in order to receive the suitable financial support that they deserve.

Motorists understand how important driving insured is, and how problematic accidents involving uninsured motorists can be.  Illinois could be the first of many states that experience lawsuits like these. It is likely that other clients in different states have experienced inadequate compensation from their insurance companies. If you believe that lawsuits like this are applicable to you, it is highly encouraged that you contact a legal expert to receive additional information. It’s possible that you are eligible for similar benefits. In the future, there may be several other cases that arise throughout the nation as a result of the lawsuits that occurred in Illinois.

Contact Information