Still no fourth stimulus check, but you might get a $400 insurance refund
Here’s one of the most important things to note about stimulus checks as we come…
Here’s one of the most important things to note about stimulus checks as we come to the end of 2021, with no possibility of additional payments from the federal government in sight at this point. Individual states around the country can certainly take the initiative to do their own thing. As Michigan is preparing to do, for example, by sending out insurance refund checks worth a few hundred dollars to eligible motorists. Other states, meanwhile, have decided to send out stimulus checks of their own. For everything from bonuses for teachers to simply giving residents their own piece of a budget surplus.
$400 insurance refunds for Michigan drivers
Michigan’s plan is reminiscent of the insurer Allstate’s announcement, early on in the pandemic, to offer partial refunds to customers. Similarly, California’s Insurance Commissioner Ricardo Lara leaned on auto insurers in that state earlier this year to cough up even bigger refunds to customers.
What Michigan is doing, meanwhile, is only similar in the form — not in the motivation behind it. While those other developments are connected directly to the pandemic, the insurance refunds in Michigan stem from something else. Specifically, a 2019 auto insurance reform law in the state.
“Michiganders have paid into the catastrophic care fund for decades, and I am pleased that the (Michigan Catastrophic Claims Association) developed this plan so quickly after unanimously approving my request to return surplus funds to the pockets of Michiganders,” Gov. Gretchen Whitmer said in a statement earlier this month.
Before that 2019 law, Michiganders were paying some of the highest auto insurance rates in the country. These refunds are going out by March 9, 2022, and drivers won’t have to do anything to get the checks.
Michigan’s effort comes as insurers that sell auto insurance policies booked almost $30 billion in profits last year. They did so for, of course, a very obvious reason. According to a Consumer Federation of America report? Everything from the number of miles driven to the frequency of car crashes plummeted as millions of people stayed home amid the Covid pandemic.
Moreover, that report shows that those insurers collected some $42 billion in excess premiums last year. While only giving back $13 billion to consumers in the form of “premium relief.”
Lara’s office earlier this year, meanwhile, said it had helped return upwards of $2 billion in insurance premium relief to drivers. Last year, the insurer Allstate decided to offer partial refunds to customers. Specifically, for their April and May 2020 monthly premiums. What that amounted to was a return of more than $600 million in premiums to customers.
At the federal level, meanwhile, we’re still waiting to see what stimulus check possibilities materialize come January. The Senate, for example, will try again to extend the child tax credit stimulus checks for another year.