The mutual insurer announced the payback process in an April 20th letter to its independent agency partners
Vermont Mutual has announced that on May 1st it will begin to contact its personal auto insureds throughout Massachusetts and New England to advise them that they will be receiving a one-time payback from the company in response to the decrease in loss frequency in its personal lines auto book stemming from the COVID-19 pandemic.
In particular, the 192-year-old mutual insurer said that it would pay personal auto policyholders a payment equivalent to approximately 20% of their auto premium for 3 months. While the insurer noted that this amount may be greater than other insurance companies, the company would prefer to issue a one*time single payment to policyholders rather in “multiple waves.” It will revisit the program, however, if the pandemic continues longer than it had originally anticipated under this decision.
“Like some carriers, we’ve begun to see a decrease in loss frequency in our personal lines auto book, resulting from the stay at home orders in place across our marketing territory. While it’s difficult to predict where this will settle and how quickly it will rebound, we have enough data to support an immediate refund for our customers”, wrote Dan Bridge, Chairman, President and CEO, and Executive Vice President & COO Mark McDonnell, in the letter to its agents.
Vermont Mutual also is offering the opportunity for insureds to donate their refund to a choice of four charities
The company also noted that in a slight difference from other such Stay-at-Home Premium relief plans, Vermont Mutual is giving its insureds the opportunity to donate their refund to several charities including Feeding America, Meals on Wheels, The United Way, and the Salvation Army. The four charities were selected based on their strong regional operations in New England.
“Another area where we are approaching this differently than most is that we will provide our customers with the opportunity to donate their refund to one of several charities we have identified that have strong regional operations in New England who are assisting with local COVID-19 relief efforts.”
Customers will have until May 15th to decide whether to accept their refund or donate it to a charity. If a decision is not made by May 16th, the money will be sent by check or directly deposited to the customer. On May 20th, donations will be made on behalf of its customers to the above-named charities.
Vermont Mutual also emphasized to its agency partner members that this new program will have no affect on agency compensation, profit sharing potential or a customer’s auto policy premium. Refunds are being processed through the insurer’s expense system, rather than as an actual policy premium adjustment for each and every customer.
