Driving Less Because of Coronavirus? You May Get a Refund from Your Insurer

Cars park near their homes in a residential neighborhood in St. Petersburg, Fla.
People are driving less due to the COVID-19 pandemic, so many insurance companies are issuing refunds. On April 9, 2020, cars stay parked in driveways in St. Petersburg, Fla., where the state has ordered all non-essential businesses to close. Chris Zuppa/The Penny Hoarder

Some auto insurers are making an unheard-of move right now: giving money back to their customers.

With fewer vehicles on the road due to stay-at-home orders in response to the COVID-19 outbreak, fewer accidents are likely to happen and the risk of accidents is reduced. That means insurance companies face less risk of paying out claims.

Here’s all of our coverage of the coronavirus outbreak, which we will be updating every day.

Given that so many people face job loss and financial uncertainty and could use a little boost wherever they can get it, at least five auto insurance companies have decided to pass some of their fortuitous savings onto customers.

Which Companies Are Refunding Car Insurance Premiums?

Allstate, American Family Insurance, Geico, Liberty Mutual and Safeco, and USAA announced this week they’d automatically return some of customers’ premiums for personal auto insurance, USA Today reported Wednesday.

  • Allstate will refund 15% of monthly premiums in April and May as a credit to your bank account, credit card or Allstate account. It’ll also offer payment relief and expand coverage for delivery drivers.
  • American Family will mail eligible customers a one-time check for $50 per vehicle.
  • Geico will provide a 15% credit to auto and motorcycle customers renewing or purchasing new policies between April 8 and Oct. 7, 2020.
  • Liberty Mutual and Safeco will refund 15% of premiums for two months and pause late fees and cancellations for missed payment.
  • USAA will provide a 20% credit on two months of premiums to members with auto insurance policies.

The refunds aren’t huge, but they’re something.

Allstate’s average yearly premium is $1,718 (as of December), so a 15% refund for two months could get you about $43.

American Family’s average comes in at $1,099, making the $50 refund about 27% of your money back per month over two months.

“Because so many people are experiencing financial hardship now,” American Family wrote in its FAQs about the payment, “we are working to get these payments issued as quickly as possible. We will print and mail checks for customers in your state after receipt of regulatory approval.”

The Hill reported on Tuesday the company had received approval in Wisconsin and would send checks starting April 6.

Geico expects an average credit of $150 per auto policy, CEO Todd Combs wrote in an email to Geico customers on Wednesday.

Liberty Mutual’s average yearly premium is $1,472, making its 15% refund worth about $37 on average. With USAA’s average yearly premium of $1,468, its 20% refund should average about $49.

The companies aren’t refunding premiums for any other types of insurance — which makes sense. American Family noted in its FAQs that homeowners insurance claims have actually increased, “likely from people staying home more, resulting in more accidents.”

Well, at least we’re off the road.

Ask Your Auto Insurance Provider

The announcements from prominent insurers naturally have people wondering whether other insurance companies will follow suit — and they might.

State Farm expects to determine by the end of the week whether it’ll refund a portion of premiums, USA reported.

“We are closely monitoring our automobile insurance loss trends and are considering how best to take this into account and return value to our auto insurance policyholders,” the company said in a statement.

We’ve also heard from some people who were able to claim refunds by calling their insurance companies.

If you have personal car insurance through Allstate, American Family, Geico, Liberty Mutual or USAA, you shouldn’t have to do anything to claim a refund. They’ll credit your account or mail checks automatically.

If you use another provider, get in touch to see what you can learn. Call customer service or hop on a chat on the website to ask what’s available and how you can claim it.

Dana Sitar (@danasitar) has been writing and editing since 2011, covering personal finance, careers and digital media.