March 5, 2024

Novoda Software

Software Guides and Reviews

7 auto insurance companies refunding or crediting premiums – see the list

Working from home isn’t all bad. In fact, there are several perks to it that can save you money in the long run. Not only are you not paying to eat out while on the job, but you’re also not commuting to work and paying for gas and car maintenance.

Plus, with the right set of tools, you can easily talk with your teammates, create documents and collaborate on projects while social distancing. Tap or click here to see the free tools tech companies are offering for at-home workers.

Unfortunately, a lack of commute and gas expenses doesn’t stop auto insurance companies from collecting a payment each month. But in light of our unprecedented situation, some of these companies are returning cash to customers because the risk is now lower for accidents. We’ll show you if yours qualifies.

Empty roads mean lower premiums

Many industries are struggling under the weight of the COVID-19 pandemic, but auto insurance sure isn’t one of them. With fewer drivers on the road (and therefore fewer accidents), claims payouts have decreased drastically. This means the auto insurance industry may be one of the few to show strong first-quarter financial results.

This huge slump in driving poses an interesting question: Do people even need to pay as much for premiums if they’re mostly staying indoors? Well, a few insurance companies believe so, and they’re taking advantage of the unexpected windfall to pass some savings on to customers.

Related: Tap or click here to see how cheap car insurance can put your privacy at risk.

Auto insurance companies have been announcing plans to either reduce the cost of premiums during the span of the pandemic or refund cash directly to customers.

Allstate, one of the nation’s biggest insurers, told the “New York Times” that it would refund most customers 15% of their monthly premium back during April and May. These refunds would be credited to customers’ bank accounts, credit cards or Allstate accounts in the coming weeks.

Another smaller company, American Family Insurance, reported that it would be issuing a one-time cash payment of $50 per vehicle insured to each customer. The exact nature of this disbursement has not been announced, but it will likely be similar to Allstate’s option in the form of a bank or insurance account credit.

Update: Geico has also outlined its plans for crediting policyholders. Any policies up for renewal between April 8 and October 7, 2020, will receive a 15% credit. No action is required from the policyholder, but Geico estimates that customers will save an average of $150 per auto policy and $30 per motorcycle policy.

Newly purchased policies will also have this credit applied automatically. I guess Geico’s ads are true: They can save you 15% or more.

Here’s a list of insurance companies participating:

  1. Allstate – Will refund most customers 15% of their monthly premium back during April and May.
  2. American Family Insurance – Will be issuing a one-time cash payment of $50 per vehicle insured to each customer.
  3. Geico – Providing a 15% credit to all auto and motorcycle customers as policies come up for renewal, between April 8, 2020, and October 7, 2020.
  4. Liberty Mutual – Will issue a 15% refund on premiums.
  5. Nationwide – Offering a one-time premium refund of $50 per policy for personal auto policies active as of March 31, 2020.
  6. Progressive – Active personal auto insurance customers will receive a credit for 20% off April and May premiums. The company said it may add additional credits in the upcoming months.
  7. State Farm – Approximately 25% credit on premiums paid between March 20 and May 31.

Most of these discounts and refunds are automatic, so you don’t need to do anything. If you want to see specific details on your policy check out your insurer’s website. We’ll update this list if more companies decide to participate.

Related: Tap or click here to save on your premiums with these affordable dash cams.

My company is eligible! How do I qualify?

The good news is you shouldn’t need to take any action at all. Although the exact steps are still unknown for the time being, Allstate’s plan is the most detailed and may serve as a template for other companies.

You will more than likely receive direct credit to your insurance account (which will apply to future premiums), but it might be a good idea to call your insurance company to discuss the best option for you. Allstate says that it will be able to directly credit customer bank accounts for the refund, which may be a better option for the cash-strapped among us.

In the meantime, we’ll be keeping a close eye on the other insurance companies as they make their movies. Amid all the chaos, it’s comforting to see a bit of good news in that car accidents have significantly declined.

A 2018 report by the World Health Organization revealed that someone dies almost every 24 seconds from auto accidents. At the very least, that death factor in the U.S. has been greatly reduced for now. And we might even get a surprise deposit out of it as a result.

It just goes to show you that staying home and flattening the curve pays off — literally!