insurance

Coronavirus Car Insurance Rebates for the Road Less Traveled

People are driving less, and that means big auto insurance companies such as State Farm, Allstate and Geico are giving coronavirus-related rebates.

The coronavirus pandemic has torpedoed the economy, our health care system and our everyday lives, but here’s some good news: There’s a good chance you’ll pay less for your car insurance.

With fewer drivers on the road, and therefore fewer claims, U.S. auto insurers are lowering insurance rates, through credits against future premiums or refunds of money already paid. American Family Insurance, which writes policies mainly in the Midwest, was the first insurer to act, offering one-time $50 refunds for each insured vehicle. Since then, all of the major auto insurers have offered some form of relief. And more discounts could be coming if millions of Americans continue to work from home and avoid non-essential travel. A study by the Consumer Federation of America, an advocacy group, and the Center for Economic Justice, an insurance, credit and utilities advocacy group, concluded that the relief offered so far is insufficient given the likely drop in insurance claims.

Insurers have adopted different approaches to premium relief. For example, Allstate and Liberty Mutual granted 15% refunds on premiums for April and May, while Geico announced a 15% refund, but only as customers’ policies come up for renewal between April 8 and October 7, 2020. State Farm, the largest U.S. auto insurer, said customers can expect to receive a credit of about 25% on premiums paid from March 20 through May 31. USAA will provide a 20% credit on two months of premiums while Progressive and Farmers announced a 20% and 25% refund, respectively, for the month of April.

If your mileage has decreased significantly and your insurer hasn’t offered any refunds or credits, contact your provider and ask for a rate that reflects your lower risk, says Doug Heller, insurance consultant for the Consumer Federation of America. If you’re unable to get results, don’t cancel your policy until you’ve found one to replace it. In most states, if you go without coverage, insurance companies will charge you more once you return to the market, he says.

Most Popular

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
May 4, 2021
How the Social Security Earnings Test May Affect Your Retirement
social security

How the Social Security Earnings Test May Affect Your Retirement

If you start taking Social Security benefits before your full retirement age and decide to continue working, you need to understand how the earnings t…
May 11, 2021
Refunds for $10,200 Unemployment Tax Break to Begin This Month
Coronavirus and Your Money

Refunds for $10,200 Unemployment Tax Break to Begin This Month

The IRS will start issuing automatic refunds sometime in May to people eligible for the unemployment benefit tax exemption.
May 10, 2021

Recommended

Annuities: How They Could Work for You
Financial Planning

Annuities: How They Could Work for You

No doubt, investing in annuities can be a tough call for the active investor. But there comes a time when relinquishing some control in exchange for r…
May 6, 2021
Umbrella Insurance – Do I Need It?
insurance

Umbrella Insurance – Do I Need It?

You might think your home and auto insurance offer more than enough coverage, but if you’re wrong, one very bad day could wipe out your wealth. That’s…
May 5, 2021
Stimulus Plan Has Health Insurance Benefits, Too
Coronavirus and Your Money

Stimulus Plan Has Health Insurance Benefits, Too

The plan’s health care provisions could deliver big savings for early retirees and laid-off workers.
April 29, 2021
RV Insurance: Everything You Must Know
insurance

RV Insurance: Everything You Must Know

Selecting the right RV insurance is a big decision to protect your investment. Here's what you should know about the costs and different coverage type…
April 1, 2021