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How much is your COVID-19 car insurance refund?
Car insurers are issuing refunds – is it enough?
A discount makes sense: You haven’t been driving much because of the COVID-19, so there’s a much lower chance of you getting in an accident. Fortunately, most insurers have recognized this and are giving their customers a COVID-19 auto insurance refund due to lower claims. Here’s how much, when, and how the refunds compare.
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What was the average COVID-19 auto insurance refund?
Your refund may be different than your neighbor’s because of your carrier and the factors they use to calculate your monthly premium. But in general, most car insurance companies are refunding about 15% back. Here’s our handy table to see how your car insurance company compares, along with links to your insurer’s COVID-19 refund policy.
Example: How much each car insurance refunds based on an annual full coverage premium of $1450.00.
|Car insurance carrier||Calculation||Refund amount (assuming $1450 annual premium)|
|Erie||5% On your annual premium||$72.50|
|American Family||$50 per vehicle||$50 for one car, $100 for two cars|
|State Farm||25% from 3/20 through the end of May||$69.71|
|Farmers/21st Century||25% for April and 15% for May||$48.33|
|Progressive, USAA||20% on March and April premiums||$48.33|
|Nationwide||$50 per policy||$50.00|
|Liberty Mutual, Mercury, Safeco, and Allstate, Kemper, Hartford, Travelers, Esurance||15% on March and April premiums||$36.25|
|Geico||No refund. But, you’ll get 15% applied as a credit when you renew (boo).||$217.50|
So what does a COVID-19 auto insurance refund look like for you?
According to US News and World Report, for drivers 25 and 35 years old, the average annual car insurance premium is $1,416 (assuming a medium level of coverage, a clean record, and good credit). If you only insure yourself for state-required minimum liability coverage, CarInsurance.com reports premiums to be about $600 per year.
Here’s what the refund math looks like if your insurer refunds 15 percent back for April and May premiums:
|Car Insurance||Monthly Premium||Your total refund for April and May|
How companies are handling COVID-19 auto insurance discounts varies by the insurer — some will send you a check, others credit your account or next billing cycle. Insurers say that refunds will be applied automatically and that you do not need to take action. But if you don’t see your credit soon, definitely call your agent.
Should car insurance companies refund more?
Although most people are grateful to get a refund, many think it’s not enough. The insurers are still trying to figure out how the coronavirus impacts their business and what to do about it, but states heavily impacted by COVID-19 are already pressing for more:
Robert Hunter, Director of Insurance for CFA and former Texas Insurance Commissioner says, “Consumers might need double this amount to balance how much they pay with how much they drive this year. We expect companies and commissioners to help make this right as Americans struggle through this crisis.”
A new study just released by two consumer groups, The Center for Economic Justice (CEJ) and the Consumer Federation of America (CFA), shows a decline in miles driven and crashes due to the COVID-19 pandemic. Among the groups’ findings are that the premium relief, although welcome, is not sufficient given the likely drop in accident claims.
For example, comparing 2019 to 2020 in three states, there’s a significant drop off in driving and collisions:
- North Carolina – data collected by the consumer groups in North Carolina reported the last month and a half, there’s been a reduction in miles driven by at least 50%.
- Iowa — according to the Iowa Department of Transportation, traffic in Iowa has fallen 40% to 50% compared with the same period in April 2019.
- New York – The New York City Open Data project shows collisions in March declining by over 35% from 2019 to 2020.
What can you do?
At this point, car insurance companies haven’t announced if they will offer any new relief efforts, but we are hoping they will take a more personalized approach to the problem.
You can also take matters into your own hands. If you’re driving less, paying too much or unhappy with how your current car insurer is handling the pandemic, shop around and compare car insurance rates. Even if you’re getting a small refund, it may not make up for the extra costs you’re paying.
Enter your zip code to see how much you can save.
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