With strict shelter-in-place orders (owing to the coronavirus outbreak) in several U.S. states and all over the world, most of the people’s cars are sitting idle in garages and driveways because they can’t go anywhere.
To further exacerbate matters, unemployment has skyrocketed as well and it looks like we are getting into a recession. In spite of the US government has officially initiated the national stimulus package, car insurance companies are feeling a lot of pressure to refund insurance premiums to its customers.
To that end, most insurance companies are doing exactly that as the situation surrounding the COVID-19 outbreak worsens.
Keep reading to learn why companies are refunding and which car insurance companies are refunding money to its customer base.
Why Companies Refund?
Owing to the current coronavirus pandemic and the resulting shelter-in-place orders, individuals are not driving as much as they did before, and the number of commuters has experienced a significant drop.
Just as the COVID-19 restrictions started to spread globally, most commuters began to alter their behaviors in early March.
There are fewer cars on the road, no doubt. Also, there has been a sizeable reduction in insurance claims and collisions. As a result, many major cars ensuring companies are offering refunds to their customers to facilitate them in this tough time and help them save some money.
Which Companies Are Refunding Money?
The following is a list of leading car insurance companies who have announced credit or cash refund plans. They have also given information as to how much money customers can expect to receive in the form of refunds if they are policyholders.
Keep in mind – due to the number of homeowners impacted by the coronavirus crisis, many lenders are experiencing unprecedented call volumes. You may need to wait a lot more than usual. You shall check out your lender website before calling.
Farmers Insurance has offered to slash down its customers auto insurance premiums in April by 25 percent.
The reduction in premiums will be automatically applied as a credit on the billing statement that you receive next. Farmers Insurance would grant you a refund for the reduced amount if you paid your account in full recently.
Owing to the prevailing COVID 19 pandemic, Nationwide is offering every person (and their employees as well) who has a policy with them a $50 premium refund per policy (one-time) for personal auto policies that are in effect as of March 31, 2020.
The insurance company has said that refunds will be credited to their customers’ most recent method of payment automatically within the next thirty days.
They are offering a 15% credit for motorcycle and auto policyholders at their renewal time from April 8 to October 7, 2020.
The credit will also be applicable to the new policies bought during this period of time. According to the company, it is expecting the credits to average around 30 dollars/motorcycle policy and 150 dollars/auto policy. Customers do not have to take any steps to get credit.
Rather, the company will issue the credits when the customer’s insurance policy renews. Through April 30, Geico has also stopped canceling policies on the grounds of nonpayment and is ready to collaborate with its customers on various payment options
The Hartford is providing a 15 percent payback on two months’ premium worth. It's relevant for all customers holding an active auto policy as of April 1, 2020.
Esurance is offering its consumers a 15 % cash refund for the months of April and May. It would be via a paper check or through the customer’s original payment method.
United States of America’s 10th biggest auto insurer, Travelers, has arrived at the decision to offer personal auto insurance customers a 15% automatic premium credit for the months of April and May in 2020.
Liberty Mutual recently made an announcement regarding its “Personal Auto Customer Relief Refund”. They said that it would give back about 250 million dollars to all of its customers who have a policy with them.
Customers with a personal auto insurance policy will receive a refund to the tune of 15 percent on two months of their auto insurance premium, based on the amount of premium as of April 7, 2020.
The company also said that the amount will transfer automatically and will be credited by check or through the customer’s recent payment method.
This car insurance company announced that the average personal auto insurance consumer would get back 15% in terms of refunds based on their monthly premium amounts in the months of April and May.
The money will be applied as credits to their account or deposited back on the credit card or bank that the customers use to pay premiums.
State Farm recently announced that their company would refund around 2 billion dollars dividends to all of its auto insurance consumers. This dividend is included in the Good Neighbor Relief Program.
The program also encompasses neighborhood philanthropic monetary relief and customer payment options.
In their organization’s history, this dividend happens to be the single biggest dividend paid to customers. A majority of customers will see a 25 percent policy credit on average.
According to Progressive, personal auto policies that are active at the end of April will get a credit equivalent to 20 percent of their April premium, owing to the large number of customers staying in their houses during the COVID-19 pandemic.
Moreover, the company also said that it is offering the same credit to its current personal auto customers for the end of the month of May. Additionally, they may offer extra credits in the upcoming months, as the coronavirus pandemic carries on.
The credits will be calculated automatically at every month’s end and either applied or refunded to any outstanding amount by the middle of the next month. (Hence, you can expect your April refunds to come in by the second quarter of May).
When Will You Get Your Car Insurance Refund?
The car insurance refund you will receive, and the timing of these refunds will vary based on your insurance policy and provider. For instance, Allstate will issue payments to its customers every month.
Similarly, if you have a policy with Liberty Mutual, you can expect to receive your car insurance refunds. It will be in the next couple of weeks, as soon as the organization gets authorization from state insurance regulators.
Furthermore, the dates for car insurance refunds will also vary from state to state since every regulatory agency has to separately sign off on these actions. (It is most likely that the agencies will fast track these processes owing to the current coronavirus outbreak).