The coronavirus pandemic has turned life upside down for all of us.
But here’s a crazy twist you might not have expected: Instead of you sending money to your car insurance company, the insurer might return some cash to you soon.
Allstate Corp., American Family Insurance and Geico have announced plans to make partial refunds of car insurance premiums to their customers, and a couple of other major auto insurers are considering doing so.
Allstate Corp. calls its effort a Shelter-in-Place Payback. The company says Allstate, Esurance and Encompass car insurance customers can expect to receive this rebate:
“Most customers will receive 15% of their monthly premium in April and May, totaling more than $600 million. Customers will receive the money back through a credit to their bank account, credit card or Allstate account. The fastest way for customers to receive this payback is to utilize the Allstate Mobile app. We are working with state insurance regulators to move forward expeditiously.”
At American Family Insurance, customers will get a payment of $50 per vehicle that’s insured with the company as of March 11.
A total of 2.3 million checks are expected to be processed over the next two months, the insurer says:
“Checks will be mailed to customers in Wisconsin, where American Family Insurance is based, beginning this week, following recent approval from the state Office of Commissioner of Insurance. Payments to customers in the company’s additional 18 operating states will follow, pending approval from their insurance regulators.”
Geico says it will give a 15% credit to current auto and motorcycle customers when their policies come up for renewal between April 8 and Oct 7. It also will give the same credit to customers who buy a new policy during that period.
CNBC reports that both State Farm and Progressive are reviewing their policies and deciding how to respond to the decline in driving at this time.
Why are car insurers giving back money?
Car insurance companies are not in the habit of throwing around free money. So, what gives?
The car insurance companies say both driving time and accidents are down as many people have hunkered down in attempt to slow the spread of the coronavirus.
As Geico says in a company announcement:
“Shelter in place policies have reduced driving significantly. Vehicle accidents are down considerably, and although GEICO expects a return to near normal once the impacts of COVID-19 subside, GEICO remains committed to serving its customers’ changing needs in the best way it can.”
While premium rebates can put cash in your pocket, don’t simply assume that such a gift means you are paying the lowest car insurance cost. Comparing rates can help you save big money.
If you don’t want to bother with the hassle of shopping around, consider having someone else do the job — all at no cost to you.
Services like The Zebra and Gabi will gather quotes for you. Money Talks News founder Stacy Johnson tried Gabi, and liked what he found, as he details in “How I Found $546 in Car Insurance Savings in Under 10 Minutes.”
You can also find more tips on trimming your car insurance tab in “4 Overlooked Ways to Save 12% on Car Insurance.”
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