How to get a refund or credit on your car insurance if you’re driving less amid COVID-19 pandemic
CINCINNATI - Stay-at-home orders issued across the country and other COVID-19 related precautions amid the global pandemic have led to far fewer people on the road. As a result, drivers may be able to save money on insurance for driving less.
More than 82% of auto insurance companies in the U.S. are offering policyholders refunds and credits, totaling more than $6.5 billion over the next two months, according to the Consumer Federation of America.
What’s being offered?
The consumer advocate group says 35 of the largest insurers in America, including State Farm, GEICO and Liberty Mutual, have offered some form of relief to account for COVID-19 changes.
State Farm auto customers can expect to receive an average credit of about 25% through May 31, according to its website. Credits will be applied automatically as early as June.
GEICO is offering a 15% percent credit for auto, motorcycle and RV policyholders on their next six-month or 12-month policy term.
Liberty Mutual auto insurance customers will automatically receive a 15% refund on two months of their annual premium.
Allstate has a "Shelter-in-Place Payback" plan to give customers 15% back for April and May premiums, and Progressive said it would issue an automatic 20% credit at the end of April or May.
Strategies to save on insurance:
Regardless of your insurer, experts suggest picking up the phone and asking the company to see how you might be able to save.
Money.com, a personal finance news and advice website, suggests telling your insurance company that your vehicle will be driven less than 5,000 miles annually — or perhaps even less than that — and you could save 30% or more.
Customers should also make sure their car is classified as a “pleasure use” vehicle, rather than for commuting, to save an average of $150 per year on their insurance policy.
The site also suggests shopping around with different insurance companies and reminding your current insurer about the savings being issued by competitors.
Lastly, if you’re willing to pay more out of pocket in the event you get into an accident, shifting your deductible from $250 to $1,000 or higher will result in a significantly cheaper car insurance premium.
“We applaud the many insurance companies that have recognized that they cannot sit on policyholder premium while their customers sit at home,” said J. Robert Hunter, director of insurance for CFA and former Texas Insurance Commissioner, in a statement.
“But consumers might need double this amount to balance how much they pay with how much they drive this year. We expect companies and commissioners to help make this right as Americans struggle through this crisis,” Hunter added.