Can You Get a COVID-19 Discount on Your Car Insurance?
Which companies are paying, and how it works
The coronavirus has altered almost every aspect of our daily lives. With so many people staying home to stay safe, countless people and businesses are feeling the economic effects of COVID-19, and we are all looking for ways to save money and cut costs. With national auto traffic levels declining steadily since early March, many car insurance companies have looked at the data and have found ways to help drivers by offering ways to save money and, in some cases, issuing discounts or refunds on insurance premiums.
Car insurers have promised more than $6.5 billion in returns, discounts, or premium adjustments to customers during the pandemic, according to the Consumer Federation of America (CFO), a research and advocacy organization.
- Many of the nation’s car insurers are issuing premium relief payments
- Others have been slower to respond, if at all
- Stay-at-home credits vary by insurer; some are based on percentages of monthly premiums
- Certain insurance companies are giving flat, one-time refunds
- If your insurer does not offer you a discount, ask it to adjust your rates for reduced use
Which Insurers Are Refunding or Discounting?
In early April Allstate Insurance was one of the first to announce that it would be providing relief valued at more than $600 million to car insurance customers by means of a 15% premium payback. Since then, other insurers also have made adjustments to their car insurance premiums or issued refunds for lowered car usage due to COVID-19.
Top Car Insurers’ Actions
These large companies have committed to recognizing policyholders’ anticipated reduced driving (and fewer claims) attributable to the pandemic:
State Farm: Immediate dividend payment in the form of a credit to policyholders from March 20 to May 31. They estimate customers will see a 25% premium credit. No action is required; State Farm will issue the credit automatically.
Allstate: A “Stay at Home” payment of 15% of their monthly premium from April 8 and through May. The company said that customers can expect to receive this check in the mail in May. Allstate has since extended the discount to include the month of June.
Farmers and subsidiary 21st Century: Automatically reducing April’s personal auto premiums by 25% and the same premiums in May by 15%; no action required by covered customers.
In New York State, Farmers issued a 40% one-time credit which was paid out by May 18th to all eligible policyholders.
Progressive: As part of its Apron Relief Program, a 20% premium credit is being granted for insureds’ April and May premiums. Progressive will calculate the credit at the end of each month and apply it to your account a few weeks after that.
American Family: A one-time, $50 refund check per car to any of its customers who had a policy in force as of March 11, 2020 (the date the World Health Organization [WHO] declared COVID-19 a pandemic). American Family expects to return $200 million to its customers. You do not need to call to receive payment—you can use the company’s relief payment tracker to see if you will be getting a check.
Erie Insurance: It’s giving back $400 million in immediate dividends and longer-term premium reductions on its car insurance rates. The company is refunding 30% of car insurance premiums over a two-month period. There is no need to take any action, Erie Insurance will send your COVID-19 relief check in the mail in May.
Shelter Insurance: The insurer is returning 30% of customers’ personal auto monthly premiums for April and May. If you pay your premium directly through a bank account, it will issue the refund directly into that bank account. If not, Shelter will mail you a check.
If you aren’t insured with one of the companies above, there are lots of other insurers that have committed to providing some form of premium relief. Here’s an overview (as of publication time) of what some of the other insurance companies have said they will offer to their car insurance customers to recognize the impact of the coronavirus:
- GEICO: The GEICO Giveback program gives auto, motorcycle, and RV policyholders a 15% credit on the next six- or 12-month policy term.
- Amica: 20% credit on April and May auto premiums (pending regulatory approval).
- Liberty Mutual / Safeco: 15% refund on two months’ premiums. Refunds are issued automatically by check, or by the payment method you use to pay your premium, no action is required.
- Nationwide: A one-time $50 premium refund per policy, to be credited automatically to the method of payment used for your policy, no action required.
- USAA: 20% credit on two months’ worth of premiums.
- National General: 15% credit on April premiums, automatically credited on the policy.
- Chubb: 35% premium reduction for the months of April and May (and credits for subsequent months, if the situation warrants it) applied automatically on the next renewal of the car insurance policy.
If your insurance company is not on these lists, or if it has not yet announced premium relief, it’s worth giving your policy representative a call to find out what options may be available.
According to driving data aggregator Arity, personal travel miles are down almost 70% in some states since March 8, while other states’ are down 45%.
As insurance companies see data or claims levels drop further, they may increase discounts, or eventually get on board to issue credits and help with some premium relief.
How Much Can You Expect to Get?
How much you get back will depend on your annual car insurance premium, and what percentage of that the insurer is giving back. For example, if we put the average annual cost of car insurance at approximately $1,000, Your monthly premium is about $83, so a 30% discount per month would be about $25 per month. These refunds are not huge, but even a few dollars may be helpful if you’ve been furloughed, lost your job, or are facing unexpected expenses.
What Dates Do Discounts Cover?
Each insurance company will have different criteria for its car insurance discount time periods. In general, you can expect relief that would cover the months of March, April, and/or May. Because this situation is not over, and each state adopted different stay-at-home dates, it could vary.
Is Homeowner’s Insurance Included?
If you have your home insured with the same company as your car and you get a discount on your car premium, you may be wondering if a home insurance discount may also be in the offing. Unfortunately, the insurance companies have not yet responded with similar discounts on their home insurance.
State Insurance Actions to Help
The state agencies that regulate insurance providers also are asking insurers to consider the financial impact of the coronavirus on customers. Here are some examples of state relief-focused actions, according to the National Association of Insurance Commissioners (NAIC):
- California ordered insurers to provide premium refunds or discounts to those affected by COVID-19.
- Delaware encouraged auto insurers to enact premium paybacks.
- New Jersey directed insurers to provide financial relief to residents and businesses with a minimum 90-day grace period for home, renters, and auto insurance.
- Vermont alerted its auto insurance customers to savings the state had approved from several insurers that applied to offer residents partially returned premiums, credits, and reduced rates at renewal during stay-at-home orders.
If you would like to learn about state-specific initiatives in your area, you can contact your state insurance commissioner.
Financial Relief Measures
If you are struggling to pay your bills due to COVID-19, premium discounts or refunds are only one way that insurance companies are trying to help. Numerous insurers also have committed to not cancel a policy for nonpayment during the COVID outbreak, some have waived insufficient funds, or “NSF,” fees and most are open to setting up payment arrangements, if you give them a call.
If you are insured with one of the companies that have not issued a statement about premium refunds related to COVID-19, consider calling them anyway and asking. If your insurer does not offer you a discount, ask it to adjust your rates for reduced use during the period when you’re not commuting to work and driving less. Things are changing daily, and more insurers may decide to step up and lend a financial hand during this challenging time.