Your auto insurance bill could be significantly cheaper in the next few months as auto insurance companies offer refunds and rebates.
Because most of the country has been effectively shut down due to the coronavirus pandemic, many people aren't driving nearly as much as they would otherwise. This, in turn, has led to an unprecedented drop in the number of auto insurance claims carriers are paying out — so many carriers are returning that money to their customers.
Most insurers across the country are offering some sort of discount or refund, says Fabio Faschi, an auto insurance expert with Policygenius. At a minimum, he says, most consumers should be able to get at least 15% off their premiums for April and May.
And while some states, like California, have mandated that insurers offer refunds on premiums for March and April, other carriers are using refunds and discounts as a promotional tool. "'It's not exactly a price war, but the insurers are very much aware they're in the public's eye," he says.
Video by Jason Armesto
Any discount, refund, or premium reduction you're able to get will mostly depend on which carrier you purchased your policy from. A recent report from the Consumer Federation of America shows that some carriers are offering more robust discounts than others.
State Farm, for example, is offering refunds of 25% on policies for the months of April and May. Meanwhile, GEICO is offering a 15% credit — but policyholders won't see that money until they next renew their policy.
The good news for consumers is that getting that money back may be easier than you think. Here's how I did it.
To make sure I wasn't missing out on potential savings, I reached out to my auto insurance carrier (a large, national company) to see what they are offering customers. I renewed my policy in March, paying for six months of coverage in full. But my car has largely been sitting unused in my driveway since mid-March.
To see how if I could get a refund or discount, I called up my carrier's customer service center to see what they were offering. The representative told me I was eligible for a 20% credit for the months of April and May, no questions asked.
Also, as it turns out, no action was actually required on my part — my carrier is automatically issuing premium credits for April and May. The money will be credited to my debit card two weeks after the end of each month, since I had already paid my six-month policy in full. The credit will total around $25 per month, or $50 total.
For now, anyway.
Depending on how the pandemic plays out in my home state of New York, it's possible I could receive additional refunds or discounts. New York has extended its shelter-in-place order until May 15.
If you haven't heard anything from your insurance agent or carrier about refunds, you can give them a call. But Faschi says that most people probably don't need to contact their insurers, as most are automatically issuing refunds and credits.
"Largely, these are refunds that are being credited back automatically — there's nothing that the customer needs to do to get this money back." Further, even if you're still driving to work — if you're an essential worker, for example — you should still be able to get the discount.
"There's not much going on in terms of enforcement," Faschi says, so most drivers, whether they're working from home, furloughed, or still heading into work throughout the pandemic, will likely qualify for a discount.
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