Auto Insurance Companies Are Offering Coronavirus Relief With Discounts and Credits. Is Yours on the List?

You may get money back on your April and May premiums. Here's how

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If you are one of the hundreds of millions of people staying home due to the coronavirus, then you’re probably not driving as much as usual. No commuting or taking kids to school, fewer trips to the store and a virtual end to social interaction could have your car getting dusty in your garage or driveway.

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If you’re not driving your car, or have dramatically cut back, you may be able to save on car insurance by reducing, changing, or even temporarily canceling coverage. Here are four ways to cut back on auto insurance costs while you’re sheltering in place to avoid COVID-19.

1. Apply for a Discount or Refund

Some insurers are offering discounts or refunds, including nationwide companies like GEICO and Allstate. If your auto insurance provider isn’t on the list, it’s worth contacting their customer-support team to request a refund. Similarly, many insurers are offering assistance to people whose incomes have been affected by the coronavirus stay-ay-home orders.

Most money back comes in the form of statement credits applied to April and May premiums, but each insurer is handling their customer care program differently. So please click through the link to your issuers’ hardship offer.

Allstate Up to 15% debit or credit payback on April and May premiums (offer varies by state of registration)
American Family $50 per vehicle insured
Amica 20% credit on April and May premiums
Auto Insurance Co. 15% refund on April and May premiums
Encompass Up to 15% credit on April and May premiums (offer subject to exceptions)
Esurance 15% payback during April and May
Farmers and 21st Century Insurance 25% reduction in April premium
GEICO 15% credit on renewal between Apr. 8 and Oct. 7 and pausing cancellations for non-payment through April
Hanover Insurance Group 15% refund on April and May premiums
The Hartford 15% credit for April and May premiums
Kemper 15% credit applied to April and May premiums
Liberty Mutual 15% refund on April and May premiums
MAPFRE Insurance 15% refund on April and May premiums
Mercury Insurance 15% on April and May premiums
Next Insurance 25% reduction to its policyholders’ April general liability and commercial auto premiums
Nationwide $50 refund per policy
Progressive 20% credit on April and May premiums
Safeco 15% refund on two months of premiums
State Farm Up to a 25% credit on premiums from Mar. 20 through May 31 (offer varies by state of registration)
Travelers 15% credit on April and May premiums
USAA 20% credit on two months of premiums
West Bend $50 refund to home and highway policyholders

Special Compensation for California Residents

Good news for California residents. The state’s Insurance Commissioner, Ricardo Lara, issued an order for all insurers to refund a portion of March and April auto insurance premiums to California businesses and consumers. The order could extend through May if statewide stay-at-home restrictions continue.

“With Californians driving fewer miles and many businesses closed due to the COVID-19 emergency, consumers need relief from premiums that no longer reflect their present-day risk of accident or loss,” Lara’s order stated. “Today’s mandatory action will put money back in people’s pockets when they need it most.”

If you reside in California, be sure to contact your insurer directly for more details.

2. Shop Around for Auto Insurance

If you’ve been with the same auto insurance company for more than two or three years, it’s a good idea to shop around to make sure you’re getting the best coverage for the best price. Insurance companies tend to raise prices every year on existing policyholders. Jumping ship to a new insurance company sometimes leads to big savings.

>>COMPARE: Get an Auto Insurance Quote Today

In addition to finding a lower rate for the same level of coverage, you may find that your life has changed enough to qualify for discounts or other savings even if you stay at the same insurer. But unless you shop around, you don’t know if you’re getting a good deal.

Since you’re stuck at home anyway, turn off Netflix for a few minutes and point your browser to an auto insurance search tool. You can usually get quotes from multiple insurers with one online form in just a few minutes. There’s no obligation to make a switch. But if you find a better deal, you’ll probably want to move to a new insurer.

3. Switch to a Per-Mile Auto Insurance Plan

When I quit my day job to work from home online full-time, I had insurance from one of the big, traditional insurance companies you probably know from clever TV ads. I moved to a new state at the same time I quit my commute, so it was a good opportunity to shop around for auto insurance anyway.

I found that I could save about 50% every month by changing from a traditional insurance plan to a pay-per-mile policy. I’ve been with Metromile since mid-2016 and have had an overall positive experience. I have yet to file a claim, so I can’t speak to the claims process. But signing up and managing my insurance is easy. And saves me a small fortune every year.

Both my 2008 Toyota Corolla and my wife’s minivan have a Metromile tracker plugged into our cars’ ODB-II ports, the same computer plug repair shops use to check your engine and other problems. The tracker and companion app are easy to use and install.

4. Temporarily Cancel Insurance on an Unused Car

If you’re a two-car household and don’t need to use both cars for a while, you can temporarily cancel or suspend insurance on one car. That could cut your car insurance in half or more in some situations.

You can generally start and stop insurance at any time without penalties. If you’ve pre-paid for insurance on one vehicle, you should get a prorated refund for what you’ve already paid. When you’re ready to start up again, call the insurance company and turn your insurance back on.

The U.S. Treasury Department shares that the average person spends between $808 and $2,738 per year depending on your state. If you live in a high-cost state and can cut your insurance expense for two months, you could save around $450. In a time when millions of people are losing jobs and struggling to pay the bills, who wouldn’t want an extra $450 in the bank?

Never Drive Without Adequate Coverage

If you do cancel coverage on your car, make sure you don’t drive that car while uninsured. In addition to breaking the law, driving without insurance is incredibly risky. If you have an accident without insurance, you’ll have to pay for the entire cost out-of-pocket.

If you’re at fault and damage someone else’s property, you have to pay for it. You definitely don’t want to have to buy a new car for someone else because you drove without insurance. If someone is injured in an accident that’s your fault, you’re on the hook for their medical bills. Your personal liability when driving without auto insurance is extremely high. It’s just not worth rolling the dice.

If you followed our advice above and shopped around for insurance, you likely ran into options for various levels of coverage. Make sure you have plenty of coverage for your needs. It’s worth paying a few dollars extra each month to potentially save thousands in the future.

Don’t Pay for a Car You’re Not Using

Owning a car isn’t cheap. Between gas, maintenance, payments, and insurance, you could easily spend upwards of $10,000 per year. The Bureau of Transportation Statistics estimates car owners in the U.S. pay $9,282 for every 15,000 miles they drive. If you’re not driving at all, you shouldn’t be spending nearly that much.

You probably won’t be able to stop your car payments, but everything else can go to zero if you are not using your car for an extended period of time. Don’t pay extra for your car if you’re not using it.

>>NEXT: Money Troubles? How (and Why) Refinancing Can Save You Money

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Eric Rosenberg

Eric Rosenberg is a finance, travel, and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full-time. He has in depth experience writing about banking, credit cards, investing, business, and other financial topics. When away from the keyboard, Eric enjoys exploring the world and spending time with his wife and little girls. You can connect with him at Personal Profitability or EricRosenberg.com.

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