Auto Insurers to Give Billions in Refunds

Unless you’re one of the heroes working in hospitals, grocery stores, sanitation jobs, and other essential services or on the road delivering packages, mail, and food, you’ve probably found that you’re not driving much due to the impact of coronavirus. 

With nearly all of America under stay-at-home orders, and many people working from home or out of work due to COVID-19, America’s roads have become very, very quiet. Drives to social events, road trips, and work commutes have all but disappeared from our daily lives.

Fewer cars on the road means fewer accidents (some estimate that there’s been an 85% drop in accident frequency), less wear and tear on vehicles, and consequently fewer insurance claims and payouts. And some auto insurers have announced that they’ll give Americans some of their auto insurance premiums back!

Which Auto Insurers Are Giving Refunds?

The list of auto insurers issuing refunds includes: Allstate, American Family Insurance, GEICO, State Farm, Liberty Mutual, Farmer’s Insurance, 21st Century, and Progressive.

Allstate said it will refund about 15% of premiums paid by its customers in April and May, which comes to about $600 million. Customers will receive the rebate through a credit to their bank account, credit card or on their Allstate account. 

American Family Insurance said it will give back about $50 per car that a household has insured with the company via a one-time payment. It said that will total about $200 million.

GEICO will provide a 15% credit to all auto and motorcycle customers as policies come up for renewal, between April 8, 2020 and October 7, 2020. This credit will also apply to any new policies purchased during this period. Customers can expect to see the credit when they renew; no action is needed. The credits are expected to average $150 per auto policy and $30 per motorcycle policy, with a total benefit of $2.5 billion expected to GEICO customers.

State Farm will return $2 billion to its customers. Refund amounts will very by state and person, but most policyholders will get a 25% credit for the weeks between March 30 and May 31. Customers will start seeing the credits on their bills in June.

Liberty Mutual said it would return about $250 million to personal auto insurance customers in the form of a 15% refund on two months of their annual premiums.

Farmers Insurance and 21st Century Insurance also said their customers will receive a 25% reduction in April premiums.

Progressive Insurance said it will offer its personal auto policyholders a 20% credit for their April and May premiums, totaling about $1 billion. Customers can expect those credits to be automatically applied to their accounts in May and June.

Getting an auto insurance refund? Consider investing it in a managed MoneyLion account to help it grow. You can invest as little as $1 and withdraw anytime. And when someone asks how you spent your quarantine, you can say “I became an investor and built a path to financial security.” Wouldn’t that be a productive outcome? We think so! Learn why COVID-19 market volatility shouldn’t deter you here. 

How Else Are Auto Insurers Helping Customers? 

Allstate, American Family Insurance, and others also said their customers can delay payments on insurance premiums without penalty if they contact the companies to discuss their financial hardship and inability to pay due to coronavirus. Many insurers are also expanding insurance coverage for customers who use their personal vehicles to deliver food, medicine, and other goods. 

GEIGO says it’s pausing cancellations of coverage due to non-payment or policy expiration through April 30, 2020, or later as directed by your state, and is offering flexibility to policyholders who need special payment options. Learn more on how to contact your financial providers and ask for a payment deferral here.

Will More Auto Insurers Give Refunds?

Many consumer advocate groups are asking for auto insurers to do more, saying that they are saving billions of dollars due to coronavirus limitations on travel but only refunding a tiny fraction back to their financially distressed customers. 

Plus, even after stay-at-home orders begin to lift as we make our way through the coronavirus curve, projections are that traffic will continue to be lighter, which will keep accidents (and insurers’ costs) lower. Here’s hoping that auto insurers do the math and find more ways to share the wealth and help their customers.

We’ve been updating this article as additional auto insurers have followed Allstate, GEICO, American Family’s lead. Keep checking back for more information on which insurers are offering refunds, deferrals, discounts, or payment forgiveness.