Coronavirus-Related Auto Insurance Discounts
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In light of the coronavirus outbreak, many car insurance companies are offering discounts.
Some car insurance companies are refunding premiums to customers, for example. Others are offering steep discounts on future premiums, extended grace periods, and other benefits.
In April 2020, for example, Allstate and American Family Insurance announced they would give back about $800 million to auto insurance customers because people were driving much less during the coronavirus crisis.
With policyholders working from home, and traffic on the road minimal, the risk of getting into an accident is low. People are driving less, and that means less risk of an accident or other claim.
Auto insurance companies are approaching the coronavirus crisis in different ways. Today, we’re highlighting some of the COVID-19 car insurance discounts available.
Premium Discounts, Partial Refunds, and Grace Periods
Most car insurance companies are offering discounts on premiums, partial refunds on payments, and extended grace periods.
- Some insurers are refunding $50 per vehicle under each policy, for example.
- Other insurers are offering discounts as high as 25% on future insurance payments.
- Some companies have also suspended cancelations – even for non-payments and policy expiration. Your car insurance may continue covering you even if you haven’t paid your bill.
Let’s look at some of the coronavirus coverage discounts available today.
Allstate Coronavirus Discounts
Allstate recently announced it was refunding $600 million to policyholders. They’re calling it the Shelter-in-Place Payback.
You may receive a significant discount on your next auto insurance payment. Or, you might receive money back in your account. Allstate has announced most customers will receive a discount of about 15% on their April and May insurance premium payments.
Allstate is also willing to be flexible with payments. If you contact Allstate, you can get a 60-day deferral on payment with no penalty. You will still have to pay your full owed car insurance amount at the end of the 60-day period, however.
Allstate has also announced an automatic premium rebate program that reflects the fewer number of miles customers are driving. That means Allstate policyholders across the country should see lower premiums immediately.
Allstate announced its policy changes on April 6, 2020. The company claims to be the first auto insurance company in the United States to offer discounts.
GEICO Coronavirus Discounts
In March, GEICO announced it was pausing cancellation of coverage due to non-payment and policy expiration, effective immediately. This policy will remain in effect through April 30, 2020.
On April 7, GEICO gave policyholders more good news. The company announced that auto and motorcycle policyholders will receive a 15% credit on insurance premiums.
GEICO’s coronavirus discount is expected to be worth about $2.5 billion. The discount is also expected to last for at least six months – which is much longer than what has been announced by other car insurance companies.
Liberty Mutual Coronavirus Discounts
On April 7, 2020, Liberty Mutual announced that auto insurance customers will receive 15% refunds on two months of premiums. In total, Liberty Mutual is refunding $250 million back to customers.
Liberty Mutual is also pausing cancellation for non-payments and dropping late fees.
Farmers Coronavirus Discounts
Farmers has paused policy cancelations for customers who can’t pay until May 1. The company has also announced the suspension of late fees.
In other words, you can avoid your car insurance payment until May 1, although you’ll have to pay the accumulated amount on May 1. Call your Farmers agent or contact the company to ensure this is an option.
If it’s time to renew your Farmers policy and you cannot afford to do so, then contact the company to request an extension.
MetLife Coronavirus Discounts
MetLife has extended its grace period for people to make late payments without losing coverage.
If your grace period was previously shorter than 60 days, then it will be increased to 60 days. If your grace period was longer than 60 days, then you’ll keep that favorable grace period.
This rule applies to all premium payments from March 1 onward.
Progressive Coronavirus Discounts
Progressive is also offering payment assistance, although the company warns that your account may still show the payment as due as the system struggles to accommodate requests.
Progressive is telling customers to manually pause automatic payments. Otherwise, you will still be charged.
State Farm Coronavirus Discounts
State Farm claims to be working with customers on payment flexibility during the COVID-19 crisis, although the company has not announced any specific programs.
Contact your State Farm agent to discuss the situation – especially if you want to defer payment on premiums.
USAA Coronavirus Discounts
USAA is automatically pausing late fees and policy cancelations due to nonpayment until July 17 for customers with USAA auto or property insurance policies.
USAA is also offering payment assistance to certain customers on request. Contact USAA if you need to defer payment during the crisis.
American Family Insurance Coronavirus Discounts
American Family Insurance has announced an automatic premium rebate program reflecting the fewer number of miles customers are driving.
American Family Insurance policyholders will also receive a one-time refund of $50 per vehicle on their policy, according to an April 2020 press release.
Safeco Coronavirus Discounts
All Safeco auto insurance customers will receive 15% refunds on two months of their premiums.
Travelers Coronavirus Discounts
On April 5, Travelers announced it would accelerate commission payments to eligible agents and brokers to help them ease liquidity concerns during the coronavirus crisis. These commission payments are expected to add up to $100 million.
However, Travelers has not yet announced any coronavirus discounts for drivers or policyholders.
Should I Cancel My Car Insurance Coverage During the Coronavirus?
You’re not using your car. So why should you continue buying car insurance?
Most experts recommend keeping car insurance during the current coronavirus pandemic – even if social distancing continues for months.
Many people still need to drive to the grocery store and medical appointments, for example.
And, even though there are fewer cars on the road, there’s still a risk of an accident. Wuhan lifted its quarantine on April 7, 2020, and other countries are relaxing social distancing measures as early as April or May 2020. Slowly, things will return to normal – and you’ll need car insurance during the transition.
Lapsed insurance coverage can lead to higher rates in the future. Letting your insurance lapse today could save you money immediately, but you’ll pay higher rates when you renew your coverage. Car insurance companies do not like to see lapsed insurance coverage, as it leaves a hole in your driving history.
Most states require you to carry insurance on your vehicle even if you’re not driving it. If you cancel your insurance coverage, then your insurer may be required to alert the DMV. The DMV could then cancel your vehicle registration.
What Happens If I Can’t Pay My Insurance Because of Coronavirus?
Unemployment has skyrocketed in the United States. Many people are unable to afford bills like car insurance.
What happens if you are unable to pay your car insurance because of coronavirus? What happens if you need money for more important things – like food and medicine?
In this case, contact your insurance company immediately. Many companies are accepting deferred payment without penalty.
Allstate and many other insurers, for example, are offering 60-day payment deferrals without penalty. However, you need to contact your insurer to qualify for this discount.
How to Reduce Car Insurance Costs During the Coronavirus Pandemic
Some insurance companies have announced coronavirus-related discounts, while others have not. If your insurer hasn’t announced a discount, then you may still be able to save money on car insurance with a phone call.
Some of the best ways to reduce car insurance costs during the pandemic may include:
- Request a coronavirus-related payment delay or plan
- Suspend your coverage
- Cancel your policy
- Reduce your coverage
- Remove yourself or another driver from a policy
- Ask about discounts for essential workers
It’s a unique time for car insurance companies, but many insurers have accommodated policyholder requests.
Contact Your Insurance Company for Up-to-Date Information
The COVID-19 coronavirus situation changes daily. Insurers are adjusting in countless ways.
Contact your auto insurance provider today for the latest information on any available COVID-19 discounts.
Many small and large insurance companies are offering partial refunds, discounted insurance premiums, extended grace periods, and other bonuses.
Your company might not have formally announced discounts, yet they’re happy to accommodate your request for delayed premium payment.
Alternatively, ask about low mileage discounts, essential worker discounts, and other discounts. If you’re spending less time on the road, you should be paying less for car insurance.
When millions of drivers suddenly stop driving, it’s a good thing for car insurance companies. Claim and accident rates have plummeted. That means insurance companies are making lots of money through insurance premiums – but not covering many claims.
In response, most of America’s car insurance companies have announced some type of COVID-19 coronavirus discount – including extended grace periods, discounted premiums, or partial refunds.