Published in: Banks | May 11, 2020
Surprise Savings During Coronavirus: Your Auto Insurance Premiums
By: Maurie Backman
You may be getting a bit of financial relief at a time when you could really use it.
The novel coronavirus crisis has caused financial distress for millions of Americans across the country. Unemployment claims are through the roof, and those who have managed to retain their jobs thus far may be worried about having their hours cut or being next on the chopping block.
Thankfully, there's some relief to be had. The CARES (Coronavirus Aid, Relief, and Economic Security) Act has already boosted weekly unemployment benefits, dished out small business loans, and sent $1,200 stimulus payments to a large number of Americans' bank accounts, with more on the way. But here's another source of financial relief you may be entitled to during this time: a refund on your auto insurance.
Why are auto insurance refunds going out?
Auto insurers bear the risk of paying for vehicle damage or other expenses resulting from car accidents or theft. They take that risk into account when determining what premiums to charge their customers. But when cars are sitting parked in driveways and garages for weeks on end due to social distancing mandates, the risk of an accident or theft declines substantially. As such, some insurance companies are passing on that savings by returning money to customers who have paid their car insurance premiums.
Who's helping consumers out during the COVID-19 crisis?
A number of companies are offering partial refunds or other discounts to help consumers during this difficult time. According to Fortune, here are just a few of them:
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- Allstate intends to return $600 million in premiums to customers in April and May. That works out to 15% of the cost of the average consumer's monthly premium.
- Farmers Insurance is cutting rates on April premiums by 25%. Customers don't need to take action; that reduction will be applied as a credit.
- Geico is offering customers a 15% credit on their next full policy term. That should result in an average savings of $214.
- Liberty Mutual is giving out about $250 million in refunds, in the form of a 15% rebate on two months' worth of premiums.
- Nationwide is offering a $50 refund per policy activated prior to March 31 of this year, which, according to the company, amounts to a 15% refund on the average policy.
- Progressive is offering customers a 20% credit for April and May.
- State Farm is giving customers a 25% credit on their auto insurance policies for the March 20 - May 31 timeframe. That credit should be applied to bills starting in June.
- USAA is giving customers a 20% credit on two months of premiums.
If you don't see your auto insurance company on this list, it pays to reach out and ask what accommodations are being made for customers. Or, you should request a unique accommodation. You never know what savings you might reap.
Every dollar counts
Though getting a modest percentage of your auto insurance premium back may not amount to a ton of money, at a time when the country is in crisis mode, every little bit helps. And if you're doing reasonably well financially despite the ongoing crisis, you could always use that money to boost your emergency fund, invest, or donate to a charity that's helping people who aren't quite as fortunate. You could also use that money to treat yourself to something that will make the next few months easier. At a time like this, it pays to be kind to yourself.
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