Question of the Day: One auto insurer is providing $600 million in rebates to its customers in April and May. Why?

Answer: Allstate is providing rebates to its auto insurance customers in April and May as Americans drive less than normal during the coronavirus pandemic.


  • How does less driving by their policyholders help an auto insurance company’s profits?
  • Do you think this is a good idea for this company to do? 
  • If you were an auto insurance company, would you feel pressure to offer rebates to your customers? Do you think that other insurers will follow Allstate?

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (Crains Business):

The Northbrook-based insurance giant is calling the payments a “shelter-in-place payback” and says they will total $600 million over the two months. On average, policyholders will see 15 percent of their premiums refunded, the company said.



About the Author

Tim Ranzetta

Tim’s saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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