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5. Why do my Utility Clients and their Customers Need the AIG Bill Pay Plan?
For just a minute, imagine how important this program could have been to your utility and telecommunications clients and their customers had it been installed prior to when the pandemic that put tens of millions of Americans out of work.
For those Utility customers that would have been enrolled in the Plan and became involuntarily unemployed, disabled or died from accidental means their monthly bills would have been paid up to the Plan limits, subject to the terms and conditions of their Insurance Certificate. Plan benefits would have been paid directly to the sponsoring Utility making suspensions of collections or disconnections for unpaid delivered services largely unnecessary for those insured customers during the benefit period. For your Utility client, the program could have been an effective risk management tool to help preserve revenues, reduce bad debts and prevent damage to its brand by helping the customer pay their monthly bill during these challenging times.
While our country was considered prosperous before the Pandemic, it was well reported that a significant percentage of working households had little ready cash in their bank account. In May, 2019, it was reported by the Federal Reserve that 46% of Americans could not cover $400 emergency expense with savings. Now, it’s a lot worse. Among the largest bills to be paid each month are mortgage/rent and utility bills. That’s why this Plan is so important. It provides the assurance of payment towards the monthly utility bill when the insured customer is suddenly involuntary unemployed, disabled or accidentally dies, freeing up funds for other critical household expenses such as food, transportation, rent and education.
As the massive layoffs caused by the Pandemic continue, millions of Utility customers have been unable to make timely payment on their monthly bills. For the time being, much of the Utility industry is required by government mandate to temporarily defer collections and agree to shutoff moratoria. While deferring utility payments without threat of losing service have been invaluable to these millions of customers, experts estimate that the adverse financial impact on the revenue of energy and water utilities could be as high as $40B by March 2021. We all know that a reckoning will come because utility bills must be ultimately paid or forgiven. Already, state regulators have authorized one Wisconsin energy utility, Alliant Energy, to forgive up to $5M in unpaid bills to be recovered through an increase in future rates. For more information about the severity of the situation, click here: Utility customers owe up to $40B in Covid-19 debt, but who will pay it?
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