Many Americans have experienced the ups and downs that come with having insurance — whether for cars, homes, or their personal health. Insurance claims can be confusing even under the best circumstances — but throw in a global pandemic and things get more complicated.

At a time when most businesses are struggling under the weight of the economic blow dealt by coronavirus, insurance companies appear to be benefiting from it, according to a report from Reuters.

“As Americans delay elective surgeries and avoid doctors and hospitals during the coronavirus pandemic, healthcare spending declines have more than offset the added costs of COVID-19 care, insurance executives and experts say, boosting U.S. health insurer profits,” stated the report, which was released in April.

In addition, fewer people going to work or traveling means fewer chances for accidents, meaning insurance carriers are paying out less for claims.

Some insurance companies have responded by offering discounts or refunds to customers, but the big refunds some companies are quoting might not be that generous when compared to their increased profitability.

Here’s how some insurance companies are profiting off of the coronavirus — and how you may be suffering as a result.

Auto insurance

When the pandemic began, many auto insurance companies offered discounts and refunds as a gesture of goodwill.

In April, American Family Insurance announced a rebate of approximately $4 million in Auto Premium Relief to insurance holders in Utah as well as $200 million to consumers nationwide.

State Farm was even more generous. It announced refunds up to $2 billion to help customers during the challenges of coronavirus.

Many other companies offered discounts and credits to help ease the financial burden brought on by the pandemic. A complete listing published by Insurance Journal reports that the national total for discounts and rebates for auto policies is $8-$10 billion.

Utah’s local Bear River Mutual has responded with a smaller “15% Stay Home, Stay Safe dividend of their April and May premiums,” while companies like Geico are extending a 15% discount on for policy terms for both 6 and 12 months. You can use Geico’s Giveback credit estimator here.

Though these discounts and refunds were a step in the right direction, some argue that insurance companies can — and should — be doing more.

Dan Kerr, the CEO of the data analytics company ValChoice, is among those who believe the discounts alone are not enough.

“It’s good the industry is broadly participating in these credits. However, all of these discounts, rebates and credits are still dimes on the dollar compared to how much profit COVID-19 is likely to deliver to auto insurance companies,” Kerr said in a report by CNN Wire.


Health insurance

When it comes to health insurance, things get even murkier.

Similar to auto insurance, many health insurance providers offered added benefits during the pandemic.

Cigna waived all co-pays and cost-shares for COVID-19 testing, treatment, and telehealth screenings. It also provided free home delivery of up to 90-day supplies of maintenance medications and set up a 24-hour toll-free helpline for consumers dealing with stress and anxiety.

Humana offered to cover all out-of-pocket costs related to COVID-19 testing for those who met CDC guidelines at approved laboratory testing facilities.

But what seems like a generous gesture often comes with a caveat.

According to an article by Public Citizen, a nonprofit consumer advocacy organization, these fee waivers contain significant restrictions that are set to expire long before the pandemic can reasonably be expected to end. The organization urges patients to read the fine print because coverage is often unclear.

“Few of the fee waivers appear to cover costs for out-of-network care. Only two of the 25 largest insurers affirmatively state that they will cover patients’ costs for care provided by both in-network and out-of-network providers. This distinction is important because many patients might not be able to obtain care from in-network practitioners due to the high rate of hospitalization in some locations,” the article states.

Many of the discounts and fee waivers offered by these carriers were set to expire by July 1.

If you’re one of the 60% of Americans who receive coverage from a self-insured plan from your employer, you need to be especially wary of coverage exclusions. Fee waivers don’t apply to unless your employer opts to offer expanded benefits.

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And although some carriers have offered expanded benefits, not all carriers have made adjustments for coronavirus treatment. Pandemic or not, when it comes to insurance, it’s always a good idea to double-check your benefits before heading to the doctor.

The bottom line

You’ve probably heard the saying, “If it sounds too good to be true, it probably is.” Such is the case with uncharacteristically generous insurance policies — there’s usually a catch somewhere.

At the end of the day, insurance is a business designed to make money. It’s important to guard yourself — and your money — especially now. As with any other big-ticket expense, when it comes to insurance, do your research, read the fine print and ask questions before you buy a new policy or file a claim.

* Robert DeBry is retired from the practice of law

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