Haris Ashley
Due to the COVID-19 pandemic, many auto insurance companies are offering refunds to their customers. This is because stay-at-home orders have meant fewer cars on the road, resulting in a significant drop in driving and, consequently, fewer accidents. As a result, some companies are refunding money that would have been paid out in claims back to their policyholders.
| Characteristics | Values |
|---|---|
| Reason for refunds | Fewer drivers on the road due to COVID-19 restrictions, resulting in fewer accidents and claims payouts |
| Companies offering refunds | Allstate, Farmers Insurance, Geico, The Hartford, Liberty Mutual, Progressive Insurance, Nationwide, State Farm, Travelers, USAA, American Family Insurance |
| Amount of refund | Varies by company and policy, but generally ranges from 15-25% of monthly premiums or a one-time payment of $50 per vehicle |
| Timing of refund | Varies by company, but generally offered for the months of April and May 2020 |
| Method of refund | Direct refund to bank account or credit card, or applied as a credit to the customer's insurance account |
| Eligibility | Most refunds are automatic and do not require any action from the customer |
What You'll Learn
Reduced driving due to COVID-19
Due to the COVID-19 pandemic, many people have been driving less. According to Arity, a tracking group, the total number of miles travelled is down by more than 50% countrywide. This is a result of stay-at-home orders issued in various states and countries. With fewer cars on the road, there are, in turn, fewer accidents. This means that auto insurance companies are paying out fewer claims.
Because of this, some auto insurance companies are offering rebates, refunds, or credits to their customers. For example, Allstate is refunding 15% of premiums paid by customers in April and May 2020, which amounts to a total of $600 million. American Family Insurance is giving back about $50 per car, for a total of $200 million. Allstate and American Family Insurance are also expanding coverage for customers who use their own cars to deliver food and medicine during the pandemic.
Other companies that are offering similar refunds include Farmers Insurance, GEICO, The Hartford, Liberty Mutual, Progressive Insurance, Nationwide, State Farm, and USAA. Most of these refunds are automatic, but customers who have not received their refunds yet should call their insurance company to determine when they will receive it.
The COVID-19 pandemic has resulted in a decrease in driving, which has led to fewer accidents and claims for auto insurance companies. As a result, some companies are passing on the savings to their customers in the form of rebates, refunds, or credits. This is good news for customers, especially those who are financially impacted by the pandemic.
Auto Insurance Showdown: Michigan vs. Florida
You may want to see also
Refunds from major insurance companies
Due to the COVID-19 pandemic, many people found themselves driving less as a result of stay-at-home orders. This led to a significant drop in the number of miles travelled, with tracking group Arity reporting a decrease of over 50% countrywide. With fewer cars on the road, there were consequently fewer accidents, meaning insurance companies had to pay out less money for claims. As a result, several major insurers offered rebates, discounts, or refunds to their customers.
Allstate, one of the biggest insurers in the US, announced that it would be refunding most customers 15% of their monthly premium for April and May. This amounted to a total of $600 million. Allstate also said that it would expand coverage for customers who used their own cars to deliver food and medicine during the pandemic.
American Family Insurance reported that it would be issuing a one-time payment of $50 per vehicle insured to each customer, totalling $200 million.
GEICO outlined plans to provide a 15% credit to all auto and motorcycle customers with policies up for renewal between April 8 and October 7, 2020. New policies purchased during this time would also have this credit applied automatically.
Liberty Mutual offered a 15% refund on two months' worth of premiums for personal auto insurance customers.
Progressive Insurance offered customers a 20% credit for their April and May premiums.
State Farm gave customers $2 billion in rebates for those with auto insurance policies between March 20 and May 31. This averaged out to around 25% of their premiums, depending on where they lived.
Understanding Auto Insurance: Exploring Coverage C's Benefits
You may want to see also
No-action refunds
Due to COVID-19, many auto insurance companies are offering their customers refunds on policy premium payments. This is because stay-at-home orders have resulted in fewer drivers on the road and, consequently, fewer accidents. As a result, some companies are refunding money that would have been paid out in claims back to their policyholders.
Most of these refunds and discounts are automatic, meaning no action is required from the policyholder. However, if you have not received your refund or credit, you should call your insurance company to determine when you will receive it.
- Allstate: 15% refund on monthly premiums for April and May.
- American Family Insurance: one-time cash payment of $50 per vehicle insured.
- Geico: 15% credit to all auto and motorcycle customers as policies come up for renewal between April 8, 2020, and October 7, 2020.
- Liberty Mutual: 15% refund on premiums.
- Progressive: 20% credit for April and May premiums.
- Nationwide: one-time premium refund of $50 per policy for personal auto policies active as of March 31, 2020.
- State Farm: approximately 25% credit on premiums paid between March 20 and May 31.
These "no-action refunds" are a way for insurance companies to pass on some savings to customers during the COVID-19 pandemic, as fewer people on the roads mean fewer accidents and lower claims payouts.
Auto Insurance and No-Fault States: What's the Deal?
You may want to see also
Discounts for essential workers
Due to the COVID-19 pandemic, auto insurance companies are offering rebates to their customers as a result of fewer cars on the road. This is because stay-at-home orders have meant people are driving less, with the total number of miles travelled dropping by more than 50% countrywide. With fewer drivers on the road, there are fewer accidents, and so claims payouts have decreased.
Some auto insurance companies are passing on these savings to customers by reducing the cost of premiums or offering refunds. Here are some examples of discounts for essential workers:
Geico
Geico provides discounts for nurses who are members of the Association of Women's Health, Obstetric and Neonatal Nurses, and several other healthcare organisations. Geico also offers a 5% profession-based discount for nurses, doctors, lawyers, teachers, police, and firefighters.
Liberty Mutual (SafeCo)
Liberty Mutual partners with medical organisations and employers to get customer discounts.
Nationwide
Nationwide works with the American Nurses Association and provides discounts to members of that organisation.
Farmers Insurance
Farmers Insurance offers a 25% discount on April auto insurance premiums. The reduction will be applied automatically on a customer's next bill or, if they are paid in full, a refund will be issued. Farmers Insurance also offers a 5% profession-based discount for nurses, doctors, lawyers, teachers, police, and firefighters.
State Farm
State Farm offers a wide variety of discounts and is one of the largest insurance companies in the US.
Allstate
Allstate refunds most customers 15% of their monthly premium for April and May.
American Family Insurance
American Family Insurance is issuing a one-time cash payment of $50 per vehicle insured to each customer.
Progressive
Progressive offers a 20% credit for April and May premiums.
Auto Insurance Coverage: Understanding GEICO's Comprehensive Plan
You may want to see also
Customer dissatisfaction
The COVID-19 pandemic has resulted in an unprecedented situation where people are driving less, with some not driving at all due to stay-at-home orders. This has led to a significant drop in the number of miles travelled, with tracking group Arity reporting a decrease of more than 50% countrywide. As a result, there are fewer cars on the road, leading to a decrease in automobile accidents.
Despite the reduced risk of accidents, auto insurance companies continue to charge their customers the same premiums. This has led to customer dissatisfaction, with people questioning the fairness of paying the same amount for insurance when they are driving less and the risk of accidents is lower.
In response to this dissatisfaction, several major insurers have taken the unusual step of offering rebates, credits, or refunds to their customers. These companies recognize that their customers are facing financial challenges due to the pandemic and want to provide some relief. By passing on some of the savings from the reduced number of claims, insurers are able to improve customer satisfaction and loyalty.
However, it is important to note that not all customers have received these rebates or refunds. Some customers have reported not seeing any money back, despite the decrease in driving and accidents. This discrepancy may be due to the specific policies of different insurance companies, as well as the financial situation of the customer. Nonetheless, the majority of insurers are offering relaxed payment options and refraining from cancelling policies due to non-payment during the pandemic.
Best Auto Insurance Coverage for Property Damage Protection
You may want to see also
Frequently asked questions
Due to COVID-19 stay-at-home orders, people are driving less, resulting in a significant drop in the number of miles travelled. This has led to fewer accidents and insurance claims, so insurance companies are offering rebates to their customers.
The amount of money refunded varies by company and policy. Some companies are offering percentage-based rebates, such as 15% or 20% of the monthly premium for a certain number of months, while others are offering flat-rate refunds, such as $50 per policy or per vehicle.
Refunds are typically being applied as credits to the customer's account or bill, or deposited back to the bank or credit card used to pay the premium. Some companies are also offering refunds in the form of checks.
No, customers generally do not need to take any action to receive a refund. Refunds are typically applied automatically, although customers should contact their insurance company if they have not received their refund.
