Every little bit helps, right?
Many of us are dealing with the loss of wages and laying awake at night worried about our retirement investments tanking. Things that we took for granted just a few weeks ago, like being able to afford groceries (or to even find groceries) are no longer sure things for many of us. Thankfully, many car insurance companies are providing relief. In this crazy and uncertain time, we’re happy to bring you a little bit of a bright spot and bring you news about how the auto insurance industry is stepping up in response to COVID-19.
More People Staying at Home = Less Driving
One of the biggest changes to daily life for most of us is that we don’t go anywhere. Even if you are an essential worker, odds are good that you’re not using your car as much as you usually do. If your mental health is hanging by a thread, making a list of the places you’re not going might make you feel worse. Nevertheless, the auto insurance industry recognizes we’re not using our cars as much as we usually are. Insurance claims will decline as a result.
Many insurance companies are putting measures in place to offer relief to their customers. This relief comes in the form of rebates, discounts on policy renewal, and one-time lump sum payments. Your mileage (pun intended) will vary based on who you buy auto insurance from and where you’re located.
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As part of our ongoing efforts to assist customers during this unprecedented time, GEICO is providing a 15% credit to auto and motorcycle customers as their policy comes up for renewal between April 8-October 7. Customers do not need to take any action to receive this credit. As previously announced, GEICO is pausing cancellations of coverage due to nonpayment and policy expiration through at least April 30, 2020. Beyond that, we remain committed to offering maximum flexibility to policyholders who need special payment options. We have also transitioned nearly all of our associates to work from home to continue providing the 24/7 service we are known for.
Less Driving = Fewer Insurance Claims
We are all asking ourselves questions to the effect of “Can I really afford this right now?” or “Do I even need to be paying for this right now?”
While there are certainly things I’m using more of right now (if my dishwasher could talk, it would probably be saying “Helloooo, ever heard of paper plates, lady?”) but there are definitely things I’m using less of because of being in quarantine. My car is something I’m definitely using less of. I make one trip to the grocery store every 7-10 days and I’m not spending nearly as much time on the road as I’m used to. You’re probably in the same boat.
We’re bringing you specifics on how the auto industry steps up in response to everything that’s going on right now. Our goal is to be a solid resource for you during this really weird time when so many things seem uncertain.
How Does Your Car Insurance Company Stack Up?
Every day we get more news about what individual insurance companies are doing to give policyholders a break. If your auto insurance company isn’t listed, don’t give up. This is a new kind of situation and they might be figuring out how they’re going to execute a plan to help their clients who aren’t doing a whole lot of driving right now.
If you don’t get a note from your insurer or yours isn’t on our list, you can reach out and ask what, if anything, they plan to do in response.
American Family Insurance
American Family Insurance is offering a one-time $50 credit per insured vehicle. No action by policy-holders required.
The company’s website indicates they’ll be offering something soon but no details yet. If this is your insurance carrier, keep checking back.
Allstate is offering shelter in place payback of 15 percent. Policyholders are being notified by email of what actions/verifications are required.
Farmer’s insurance company is offering 25 percent refunds on April premiums only.
Geico is offering a 15 percent discount off policy renewal. While this is a nice discount, there’s no immediate relief.
State Farm is offering what they describe as a 25 percent policy credit for most policy owners. No action is needed and the credit will show up on the June statement. Their website also indicates policy-holders may be given extra time to pay their bills. Since this is fairly ambiguous, I recommend you call your agent directly with any questions.
USAA is giving a 20 percent rebate for two months. No action is required by members to get this relief. I’ve been with USAA for over 20 years and it doesn’t surprise me a bit that they’re leading the way with taking care of their insured.
If you don’t see your insurance company listed or want to read more information, you can check out the full report from Value Penguin, a division of Lending Tree, here.
State and Local Policy May Apply – Now or later
The California Insurance Commissioner is requiring refunds for March and April premiums, and potentially May if the quarantine continues. Check your state insurance commission or department (the nomenclature will vary from state to state) to see if they’ve issued any blanket policies on auto insurance premiums. Most government agencies have social media channels and/or newsletter updates, so consider following/subscribing to make sure you get updates.
Since everything about the world we live in is in a constant state of change, just because your local government isn’t doing something right now, doesn’t mean they won’t set something up in the future.
What if the Relief Offered Isn’t Enough?
For those hardest hit, a savings of $50-$100 dollars might not be enough to substantially ease financial worry. Canceling your car insurance (or not paying your premium) should be a last resort and if you’re still driving – even a little – this isn’t something you should consider doing.
That said, there may be things you can do to reduce your insurance premiums, on top of relief being provided by government agencies and individual insurance companies.
- Comparison shop- This might be a good time to get quotes from other insurance to see if you can get the same level of coverage somewhere else for less.
- Make temporary adjustments for extra vehicles- We are a two-vehicle family. Since we’re both working from home right now and our kids aren’t going out, one driver is always home. If we needed to, dropping one car to comprehensive-only or dropping an unused car entirely for a short period of time might give us some extra money.
- Look for a pay-per-mile insurance option- Pay-per-mile insurance is only available in eight states: Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington. But it could be a cost-saving option if you think your driving behavior will change for a long period of time.
Have an Honest Conversation with Your Insurance Company
Still having trouble footing these bills? Talk to your insurer. See if they’re willing to lower your rates, even temporarily. Even if they’re not willing to lower rates, they may be able to review your policy with you. They may help you decide on things to eliminate, such as uninsured motorist coverage or personal injury protection coverage. These are not mandatory in all states.
I’m normally a fan of over-insuring. That’s likely what your insurance company’s position will be, too. That said, they’re also going to understand that these are tough, unprecedented times. They may be willing to go a little further with helping you find a solution. At the end of the day, they want to retain your business.