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This spring, when COVID-19 began spreading and the country largely shut down, many auto insurers boasted about the money they were giving back to consumers.

The refunds to those who insured with them typically were about 15% to 20% of a monthly premium and were for two months.

In TV commercials, car insurance companies said it was the right thing to do during a difficult time.

But how much of a sacrifice were they really making? Consumer advocates dont think it was enough, given that people werent driving as much, so accidents and accident claims that had to be paid out were sharply down.

Insurers dont want to talk about how much theyve still profited during the coronavirus pandemic. But government filings made by one of them, Progressive, indicate they might still have come out ahead despite the givebacks thanks to the steep plunge in traffic that began in mid-March.

In a filing with the Michigan Department of Insurance which was one of three states that ordered insurers to make refunds Progressive reported a 28.7% drop in accident claims in March compared to a year earlier. It also said claims were down 31.9% this year in March compared to February.

Progressive didnt supply data for April the month that most automobile insurance companies saw their biggest drop in claims.

After expenses, the companys own actuary indicated that a 22.8% refund was warranted.

But Progressive instead chose to refund consumers 20% for April and May, calling it our best estimate of all associated effects.

At the same time, Progressive was reporting net income for April and May of $1.3 billion. Thats more than double the $566.3 million net income it reported for April and May last year, according to the insurers news releases.

Its companywide loss ratios plunged in April and May compared to those same months in 2019 again signaling more money coming in than going out.

Progressive didnt respond to requests for comment.

Insurance industry groups say the refund calculations took into account bad debt, accident severity and other costs.

Still, Douglas Heller, an insurance expert for the Consumer Federation of America, an advocacy group, calls Progressives profits beyond extraordinary.

Other automobile insurers reported accident claims dropping 60% or more this spring in their Michigan filings.

Even figuring in higher costs associated with the pandemic for instance, with more people out of work, more were unable to pay their premiums the insurance companies still are likely to have come out ahead even after giving refunds, according to Heller.

The givebacks have been relatively meager compared to the change in risk, says Heller, who calls it a coronavirus windfall for insurers.

The consumer federation estimates the springtime refunds from car insurers should have been closer to 30%. And its urging that refunds be continued this summer as many Americans are still working from home, driving less and getting into fewer accidents that insurers have to pay claims for.

The organization and another not-for-profit advocacy group, the Center for Economic Justice, sent letters to each states insurance department on June 25, asking for more relief for policyholders.

California, New Jersey and Michigan are the only states that ordered auto insurers to refund money for April and May. California recently extended that to cover June and any period after June as conditions warrant.

Illinois and most other states did not mandate refunds, choosing only to encourage some relief for consumers.

The insurance industry says figuring out the right amount to give back, while keeping enough money to pay future claims, is trickier than it appears. When they collected premiums months earlier, the companies didnt know a once-in-a-century pandemic was about to strike. And no one knows what fall or winter will bring.

Bob Passmore, vice president at the American Property Casualty Insurance Association, says insurance is perhaps the only product where you do not know the final cost of providing it until much later.

Passmore says that, though accident claims are down, people are driving faster on emptier roadways, and thats leading to more severe and costlier crashes.

The industry saw other unexpected costs. In some states, insurers were required to keep policies active during the shutdowns even if policyholders couldnt pay.

Insurers also were buying equipment so employees could work from home. And theres concern the pandemic could affect global auto parts supplies, leading to higher costs for repairs.

Traffic plummeted nationwide beginning in mid-March, when many states ordered schools and businesses to close.

In the Chicago area, traffic fell about 37% from normal levels in March, 43% in April, 22% in May and 12% in June, according to data and analytics firm INRIX.

The Michigan refund filings reveal how much the shutdowns lowered accident claims.

For instance, Allstate told Michigan regulators its accident frequency dropped 25% in March and 60% in April. The company did not respond to a Sun-Times request for May and June figures, though in its Michigan filing it estimated a 40% decrease in May.

After factoring in its costs, Allstate offered a 15% refund to its car insurance customers in April and May and later extended that to June. In its statement to regulators, the company said the giveback reflected our best insights and techniques to estimate the expected value of future costs.

Two smaller companies Selective Insurance and Electric Insurance reported even larger drops in claims. Selective saw a 67% drop by early April, and Electric reported a 73% decrease. Both gave refunds of 15%.

Unlike rate filings, which are based on years of data, the coronavirus refunds were calculated quickly, using less precise numbers.

For example, in its Michigan filing Geico justified giving a 15% credit on customers six-month renewals by saying that given the uncertainties, 15% is a number that would likely average out over six months and be fair. Geico didnt respond to requests for comment.

State Farm told Michigan its average daily claims in April dropped 50% below normal. After factoring in its costs, the company decided to refund customers an average of 30% in Michigan and 27.5% in Illinois for premiums from March 20 through May 31, appearing on Julys bills. State Farm also has announced future rate cuts, including a 13.7% cut in Illinois.

As driving behaviors continue to evolve, we are monitoring and responding accordingly, State Farm spokesman Chris Pilcic said.

Michigan insurance director Anita G. Fox said her department will review all of the refunds this month and determine whether consumers deserve more. Were going to be looking at that, Fox said. Were also looking at whether it should be more sustained.

Fox said each refund should be not just a number that they pick out of the air.

Policyholders whose driving has changed substantially should talk to their insurer about additional discounts or shop around, Fox said.

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Car insurers touted COVID-19 refunds; Progressives filings show coronavirus windfall - Chicago Sun-Times