Why an Auto Insurance Rebate May be Headed Your Way
- May 7, 2020
Summary
Shelter-in-place across most of the country has meant Americans have been driving less—and with less traffic on the road, there have been fewer accidents and claims. Many auto insurance companies are rising to the occasion and giving back to their policyholders.
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Insurance companies are giving back
It’s not often you get money back. But billions of dollars in auto insurance rebates may be headed your way, according to the Insurance Information Institute.1
Industry sources say auto insurers will be giving policyholders $10.5 billion in premiums and benefits2 either as policy credits, percentage discounts, dividends, or added insurance coverages. One leading insurance carrier said it will rebate policyholders up to 25% of auto premiums paid from mid-March through May, a massive refund totaling over $2 billion and affecting 40 million vehicles.3
During the COVID-19 pandemic, drivers have been sheltering at home, spending less time and fewer miles on the road. The result is fewer accidents, lower insurance claims, and higher profits for your auto insurer.
“Stay-at-home mandates due to the COVID-19 pandemic have caused vehicles across the U.S. to sit in parking spots and garages much more than usual. Drivers are generally staying off the roads except for essential travel and occasional trips for food and household supplies,” says one insurance industry trade publication.4 “That’s why carriers are voluntarily stepping up with relief for their customers.”
Not every company has announced rebates. But insurers representing four out of five auto insurance policies sold in the United States5 have offered to refund some portion of driver premiums, according to the Consumer Federation of America (CFA) and the Center for Economic Justice (CEJ). For example, industry leader State Farm has announced premium discounts that will appear on consumer auto insurance bills as early as June. No additional action is required for State Farm clients to receive the automatic credit. Many other companies have reported similar rebate initiatives, so check with your carrier for details, or call them to request a discount.
Where does your auto insurance stand?
Do you want to see where your auto insurance company stands? The Consumer Federation of America (CFA) and the Center for Economic Justice (CEJ) have put together a report card rating major insurance carriers from “A” to “F” based on how generously they’re rebating auto insurance premiums to policyholders. You can see how your company rates by clicking here.
1”Triple-I: U.S. Auto Insurers to Return $10.5 Billion to Customers,” Insurance Information Institute, April 13, 2020. https://www.iii.org/insuranceindustryblog/triple-i-u-s-auto-insurers-to-return-10-5-billion-to-customers/
2,4 “How COVID-19 may affect future auto insurance premiums,” May 1, 2020. https://www.propertycasualty360.com/2020/05/01/how-covid-19-may-affect-future-auto-insurance-premiums/?ref=insurancedailynews#
3 ”State Farm and other car insurance companies are giving refunds due to coronavirus — how you can get yours,”
MarketWatch.com, April 25, 2020. https://www.marketwatch.com/story/some-auto-insurers-are-giving-refunds-because-of-the-coronavirus-outbeak-heres-how-you-can-get-a-break-too-2020-04-09
5 “Auto Insurance Premium Relief Update: More Insurers to Return Premium as Refunds and Credits Top $7 Billion Through May,” Consumer Federation of America, April 23, 2020. https://consumerfed.org/press_release/auto-insurance-premium-relief-update-more-insurers-to-return-premium-as-refunds-and-credits-top-7-billion-through-may/
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