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COVID-19 CRISIS – LOWER AUTO INSURANCE BILLS

COVID-19 CRISIS – LOWER AUTO INSURANCE BILLS

COVID-19 CRISIS – LOWER AUTO INSURANCE BILLS

We have not seen much good news lately, but there may be at least one financial upside to the current COVID-19 crisis. Auto insurance companies are temporarily discounting your bills due to the necessary disruptions in driving. Several companies announced a reduction in current and near-future bills.

Since there are fewer cars on the road, and therefore fewer accidents, insurance claims are down for almost all of the auto insurers. With that unprecedented situation, insurers are either rebating portions of customers’ payments, or extending reductions in future premiums.

The largest auto insurer, State Farm, the largest U.S. announced that its insured customers will receive a 25 percent credit on premiums paid from March 20 through May 31. During the month of April, Farmers Insurance will issue 25 percent refunds, and Progressive is extending 20 percent refunds.

Meanwhile, Allstate and Liberty mutual are each offering 15 percent refunds for billing in April and May. The longest refund extension is being offered by Geico, 15 percent for all premiums that are due between April 8 and October 7. Some industry analysts believe other companies may follow Geico’s lead, if it becomes clear that the current crisis may continue through the summer.

Allstate proudly announced that in total it would return $600 million to its customers, but that figure was dwarfed by Geico, whose total returns are set to reach $2.5 billion. Geico’s credits will also be extended to new policies that are taken out during the announced refund period. Geico expects the credit to average $150 for each auto policy and $30 for the typical motorcycle policy.

But what if your insurer does not announce refunds of discounts? The Consumer Federation of America, a non-profit consumer advocacy organization, counsels insured customers to contact their insurer to request a “rate that reflects your lower risk.”

If you contact your insurer, but the company refuses to extend refunds or discounts during the COVID-19 crisis, you may want to switch companies. If you do, remember that insurers are legally required to refund any unused portion of your paid premium. Because insurers are offering various types of discounts and refunds right now, it is important to shop around before making a final decision about which company you choose. Also, check your coverage before you contact your insurer. If, for example, your policy states that the primary use of your vehicle is for transportation to and from work, and if you have lost your job, you have a valid request for premium relief.

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