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Auto Insurance Refunds and Credits During Coronavirus

With fewer cars on the road, auto insurance companies are giving refunds and premium reductions to commuters stuck at home during the coronavirus pandemic. If you haven’t received a car insurance refund — or aren’t sure if your provider is one of the companies participating — it may still be possible to get a break on your bill by simply asking or adjusting your policy.

Auto insurance relief during COVID-19: How it works

Car insurance companies are providing financial relief during the coronavirus pandemic in one of two ways: refund or credit. How that refund or credit is calculated varies. It may be based on the policies you had as of a single day or a window of time. Liberty Mutual customers, for example, receive a one-time 15% refund on two months of their auto premiums, based on their premium amount as of April 1, 2020. Progressive, on the other hand, will provide a 20% credit on April premiums and again for May premiums.

Refund vs. credit

A refund is cash you may receive by the same method in which you made your last insurance payment: a credit to your bank or credit card account if you paid by direct deposit or credit card, or a physical check in the mail if you paid by check or payroll deduction.

A credit may come in the form of reduced payments due through May. If you paid in full ahead of time rather than monthly, you may receive a refund check instead.

Coronavirus rebates by auto insurance company

Here is a list of car insurance relief programs that major insurance providers are offering. Keep in mind that these apply to eligible customers with personal car insurance. And even if your provider is giving refunds and credits, insurance regulators in your state still have to approve them. Approved refunds and credits will come to you automatically — there’s no need to contact your agent.

Provider Auto Insurance Relief
Allstate Shelter-in-Place Payback program gives 15% back to customers based on their April and May 2020 premiums. Allstate will cover customers’ personal vehicles used for commercial delivery purposes during COVID-19.
American Family  Auto Insurance Premium Relief Payments program gives a one-time $50 payment for each vehicle insured under a personal car insurance policy
Amica Mutual COVID-19 Auto Premium Relief Program gives a 20% credit on auto premiums for April and May 2020.
Erie Erie customers get a slice of its $200 million in dividend payouts. To calculate yours, multiply your annual premium as of April 1, 2020 by 0.30  and divide by 6.
Farmers Customers receive a 25% reduction in car insurance premiums for April and a 15% reduction for May 2020.
Germania The Texas-based provider is giving a one-time $25 payment for each policy in effect as of March 31, 2020 and again for each policy in effect as of April 30, 2020.
Geico GEICO Giveback program gives policyholders a 15% credit on their next 6-month or 12-month policy term.
Hanover Hanover CARES Refund will credit 15% of April and May 2020 auto premiums to policies in May and June 2020.
The Hartford COVID-19 Personal Auto Payback Plan gives 15% refunds on April and May car insurance premiums.
Liberty Mutual Customers receive a 15% refund on two months of auto premiums based on premium amounts as of April 7, 2020.
Nationwide Customers get a one-time $50 payment for each policy in effect as of March 31 2020.
Progressive Apron Relief Program gives a 20% credit on auto premiums for April and May 2020.
State Farm Good Neighbor Relief program splits a $2 billion dividend among auto insurance customers who have a policy in force between March 20 and May 31, 2020. On average, customers will see a 25% policy credit.
Safeco Customers will see a 15% refund on two months of auto premiums, based on their premium amount as of April 7, 2020.
Travelers Stay-at-Home Auto Premium Credit Program gives customers a 15% credit on their April and May 2020 premiums.
USAA Customers receive a 20% policy credit for two months of auto premiums for customers with policies in effect as of March 31, 2020. USAA is also waiving late fees through June 17, 2020.

How to lower your auto insurance premium

If your company is not giving refunds or credits during the coronavirus pandemic, you could ask for assistance based on what competitors are doing. Rebates or no rebates, you can also ask for a policy adjustment based on your new driving habits. Maybe instead of commuting an hour round trip to work, plus picking up the kids, you’re working from home and only making one 20-minute trip to and from the grocery store. With these driving habits, your risk of being involved in a crash is much lower.

In addition to refunds and credits, some insurance providers are also waiving fees and giving customers more time to pay their premiums.

Perform an auto insurance checkup

Other ways you could save on auto insurance include making sure your:

  • Personal information is up to date. If you changed addresses or no longer need to cover a driver, your premium may change.
  • Car’s information is complete. If you skipped all the detailed questions about your car when you first applied for a policy, adding in any anti-theft or safety features could reduce your premium.
  • Coverage is where you want it. If you paid off your car, you may only need liability coverage rather than full coverage. You can read here about how much car insurance you may need.
  • Available credits are being utilized. See if you can apply for safe driving credits or other available programs. You also may qualify for a policy discount through your employer, alma mater, church, credit union or civic group.
  • Deductible is appropriate. The higher your insurance deductible, the less your premium is likely to be. However, make sure any deductible you choose is within your budget in case of a claim.

One of the biggest ways to lower your car insurance premium is to comparison shop. If you’re searching for car insurance during COVID-19, you may find that larger insurance companies are more able or willing to offer affordable policies.

If you run into trouble with your insurance provider, you could reach out to your state insurance commissioner.

Don’t drop your car insurance coverage

No matter how dire your financial situation or how little you’re driving the coronavirus pandemic, if you’re still behind the wheel, don’t drop your car insurance coverage. You may still need to drive to do essential business, such as getting groceries. And even if you’re not driving, your parked vehicle could be damaged in a storm or hit by a passing car. Without insurance, you wouldn’t be covered.

Legal requirements

By law, all registered vehicles must be covered by insurance except in Iowa, New Hampshire, and Virginia, where you might need to pay an insured vehicle fee. If your insurance provider reports to your state’s Department of Motor Vehicles that you dropped coverage and your vehicle is still registered, you could have your license or registration suspended and face fines.

Many insurance companies will also charge higher premiums for people who had a lapse in insurance coverage. Premiums can increase by an average 8% if the lapse in coverage is less than 30 days and 29% if the break was longer than 30 days.

 

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