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Most Americans are currently living under “shelter in place” or “stay at home” orders due to the coronavirus outbreak — and are driving less as a result. That means many auto insurers are beginning to give back premiums.
While your car insurance rate may not be a top priority in the middle of a global pandemic, it never hurts to know what options are available and how you can save money during financially tight times.
» MORE: 8 ways to save on car insurance
Why auto insurers are giving money back
In a report published in March, the Society of Actuaries — the folks who do the math behind insurance — said, “Increased social distancing and remote work may lead to less auto coverage exposures and potentially to less auto insurance claims.” In short, fewer accidents means fewer payments for insurers to make.
These predictions are already coming true. For example, traffic in Iowa has fallen 40% to 50% compared with the same period in April 2019, according to the Iowa Department of Transportation.
Fewer cars on the roads means fewer accidents. The New York City Open Data project shows collisions in March declining by over 35% from 2019 to 2020.
Recently, many insurance companies have announced plans to return some money to their customers because of these changes.
What to know while waiting for your refund
Below, you’ll find a summary of which companies are offering coronavirus refunds, discounts or credits and the details of those offers. Before you dive into the list, a few important points.
First, none of the insurers listed here require you to do anything to get a refund (if they’re offering one). The FCC has warned consumers that there’s a chance for an increase in scams during the confusion of the coronavirus. Don’t be fooled by anyone claiming to be working for your insurer, asking for personal details to process a refund — none should be required.
Second, a refund might not be the only offering your auto insurance has. Many companies are also easing payment deadlines and pausing cancellations for nonpayment. There are things you can do to keep your coverage if you’re struggling to pay for it.
Third, many of these benefits are still awaiting state-level approval. Regulators have a lot of moving parts to keep track of, and refunds might not be part of their long-term plans.
Finally, if your driving patterns have significantly changed, this can affect your coverage. For instance, you may now be delivering food or goods for your employer in your personal vehicle. This would normally require commercial auto insurance. Some insurance companies are temporarily overlooking this distinction, but not all. It’s best to check with your provider before using your car to support your job.
» MORE: Compare car insurance online
Coronavirus rebates by auto insurer
Allstate says its auto insurance customers will get, on average, 15% back based on April and May monthly premiums. Money will be returned using the existing method of payment (credit card, check, etc.). The company says people using the Allstate app can get faster payments. Allstate is also extending coverage to consumers who use their personal vehicles for commercial purposes.
American Family is giving its car insurance customers $50 per vehicle as a one-time payment. In order to qualify, customers must have had a policy in place on March 11, 2020, the day the World Health Organization declared the pandemic. Refunds will be issued by paper check, so watch your mailbox.
Auto-Owners’ customers will receive a 15% refund for April and May payments. There are no details on the timeline for payments yet or how they will be sent.
CSAA (a regional AAA insurer)
CSAA is giving customers a 20% refund on two months’ worth of premiums. Customers who have an active policy on April 30 can expect to receive payment by May 31. Those payments will be credits for customers with a bill. Customers whose policies are paid up will get a refund to the account they used to pay their bill. CSAA is also extending coverage for customers using their cars to deliver food or medicine through May 4.
Erie Insurance is making adjustments to drivers’ rates. That means you won’t be getting a refund, but — all things being equal — you will see a discounted rate when you renew.
Farmers and 21st Century
Farmers is going to refund 25% of private auto premiums for the month of April to its customers and those of 21st Century, its subsidiary. Customers will see credits on their next bill, and those who already paid their policies in full will be receiving a refund. There’s no action required to receive the credit or the refund, and Farmers says it will continue to monitor the situation to see if more action is needed.
Geico is giving renewing auto and motorcycle customers a 15% discount on their entire policy (typically 6 or 12 months) when they renew between April 8 and Oct. 7. This discount will also apply to new customers joining Geico. You don’t need to do anything special to take advantage of the discount except renew your policy.
The Hartford is giving a discount to all its customers who had an auto insurance policy in place on April 1. Those customers will get a 15% credit toward their April and May payments. The credit is automatically applied, and customers don’t need to do anything to access it.
Kemper is offering a 15% credit toward April and May payments for customers with car insurance policies in effect on the last days of those months. The credit will be applied to the next month’s bill. Customers who have already paid up will receive a refund. No action is required to claim the credit or refund.
Liberty Mutual and Safeco
Liberty Mutual and its subsidiary, Safeco, are issuing 15% refunds on two months’ worth of payments to car insurance customers with policies active on April 7. The refund will either be a check or a deposit to the account you made the payment from. There is no action required to get your check. Safeco is also extending coverage of personal vehicles for customers who use them for commercial purposes related to the COVID-19 outbreak (delivering medicine, food, medical supplies, etc.).
Mercury is refunding 15% of two months’ worth of payments to its auto insurance customers. Those payments will be returned to the accounts they came from, and no action is required.
Nationwide is skipping the math and offering a simple $50 refund to its auto insurance customers. Anyone with a policy active on March 31 will get the refund, and no action is required. The funds will be deposited back into customers’ payment accounts. This is a per policy refund, not $50 per vehicle.
Progressive is giving its customers 20% of their April and May payments back. These credits will apply to anyone with an active auto policy at the end of each month and don’t require any action. If a policy is already paid up, the 20% will be issued as a refund to the customer’s payment account.
State Farm is giving customers about 25% back on auto insurance payments made between March 20 and May 31. The company hasn’t given specifics on how the payments will be calculated, but it says all customers will receive a refund and that those refunds will average 25% per customer. State Farm says on average, that will work out to $20 per month, per vehicle.
Travelers is giving its auto insurance customers a 15% rebate for April and May payments. The credit is available to anyone who has or had a policy in place between April 1 and May 31. This means you can receive a refund even if you are no longer a policyholder. The credit will be automatically applied, and customers who have already paid up will receive a refund to their payment accounts.
USAA is giving a 20% credit on two months’ worth of payments for all customers who had an active auto policy on March 31. Those credits will be automatically applied, and customers do not need to take any action to receive them. USAA is also extending policies for customers whose personal vehicles will be driven for business use.
What might come next for auto insurance
Many insurers are still figuring out how the coronavirus is going to impact their businesses. Some of these refunds will likely be extended, especially for companies operating in more heavily affected regions. Other options for consumers to save money on their car insurance may also arise as state regulators take action.
For instance, California’s insurance commissioner has already ordered auto insurers to “make an initial premium refund for the months of March and April to all adversely impacted California policyholders.” Many other states have also encouraged auto insurers to repay customers, offer flexible billing and extend coverage for business use of personal vehicles.
You can also take matters into your own hands. If you’re driving less, paying too much or unhappy with how your current auto insurer is handling the pandemic, shop around and compare car insurance rates. The only way to make sure you’re paying the right price is to know what’s available. Even if you’re getting a rebate, it may not make up for the extra costs you’re paying. Keeping it all in perspective can help save you money now and over the long run.