Why Are Auto Insurance Companies Giving Discounts?
As a result of the COVID-19 pandemic, auto insurance companies have decided to give refunds to their customers. The reason for this is because there are less drivers on the roads, therefore decreasing the likelihood of getting into an accident. Insurance companies calculate risk to determine how much your premium will be- and when there is less risk, the premium will drop. Which brings us to today. We all know that most companies don’t give away their services for free- especially insurance companies. Here’s a comprehensive list of those who are giving a discount, and what you can expect as a customer.
- Allstate announced they will give customers 15 percent back based on their premiums for April and May. The funds will automatically be deposited back to the bank or credit card used for the customer’s most recent payment or apply credits to accounts.
- American Family is offering a one-time payment of $50 for each personal vehicle insured with them.
- Chubb is providing its personal auto insurance clients a 35 percent premium reduction for April and May. It’s also giving U.S. small business clients whose policies renew from April through August an automatic 15 percent reduction in premiums for their commercial auto insurance.
- Farmers will reduce auto insurance premiums by 25 percent, but only for one month. The credit will be applied automatically to an upcoming billing statement or refunded to the bank or credit card account on file if the customer paid their account balance in full.
- GEICO is offering credits of 15 percent of the customer’s next six-month policy term for all auto, motorcycle, and RV policyholders as the policies come up for renewal.
- Hartford will issue refunds worth “about 15 percent” of April and May premiums to personal auto insurance customers
- Liberty Mutual is giving personal auto insurance customers a 15 percent refund on two months of their auto insurance premium, based on the premium amount as of April 7, 2020. The refund will be issued in the manner customers made their most recent payment, or by check.
- Nationwide will issue a one-time premium refund of $50 per policy for all personal auto policies active as of March 31, 2020.
- Progressive is giving personal auto policyholders a credit of 20 percent of their April or May premiums. The credit will be applied to any outstanding balance or next bill or refunded if the policy has already been paid in full. Commercial customers with a business owner or general liability policy will get a 20% credit on April and May monthly premiums.
- State Farm is giving its auto insurance customers a credit of “about 25 percent” of their premium for March 20 to the end of May—exact percentages will vary by state. Customers will receive credits applied against bills beginning as early as June.
- Travelers is giving personal auto insurance customers a 15 percent credit on April and May auto insurance premiums, rebated in the form of account credits.
- USAA is giving every member with an auto insurance policy in effect as of March 31, 2020, a 20 percent credit on two months of premiums. The credit will automatically be applied to customers’ bills.
If you don’t see your insurance company on this list, just give yours a call to see what kind of discount they will provide you. The Center for Economic Justice and the Consumer Federation of America requested that insurance companies provide such relief back in March.
If you are in a position to negotiate better rates, now is the time to shop around. Most insurance companies are trying to hang on to their customers as best they can, but it is a competitive world out there. If you do a little work, you can end up saving a lot on your premiums.
If you are struggling to make your insurance premium payments, you can also give your company a call to see what kind of arrangement they can make for you. Some have given the option to delay, others are more strict about when your payment is due. But they are all different, so see what yours will offer. You won’t know unless you speak to them and give them the opportunity to help.
All that to say, we are still somewhat skeptical on the motives of these insurance companies. We all understand that their bottom line is what they care about- we deal with them every day on our clients behalf. Sure, these refunds will help, but what do you think the real reason is that they are offering them? Was it the request for relief from the Center for Economic Justice and Consumer Federation of America? Is it just because they have compassion for their customers? Or is there another reason? We’d love to hear from you on your thoughts. Contact us today for help with your auto accident- or if you are in a financial bind as a result of the COVID-19 pandemic. We are here to help now and will continue to be here to help after this has passed.