With stay-at-home orders in place in many cities and states across the country, cars are largely sitting in driveways and garages, not going anywhere. Add in skyrocketing unemployment, and insurance companies are feeling increased pressure to refund premiums.
Several companies are doing just that as the COVID-19 coronavirus outbreak continues to grow. (State Farm was the latest, announcing plans Thursday to refund $2 billion to customers as part of the State Farm Good Neighbor Relief Program.)
The average driver will pay $1,427 for car insurance in 2020, according to Nerdwallet. The amount you’ll get back and the timing of those refunds varies by company, however. And some, including MetLife and The General, have not announced plans to offer refunds so far.
A couple of notable points: First, any refund you receive won’t be considered taxable income. And dates will vary from state to state, as each regulatory agency has to sign off on the actions separately. (Most, though, will likely fast track those.)
Here’s a look at how some of the largest auto insurance companies are handling things.
Allstate
Allstate plans to return $600 million to customers in April and May. The average amount will work out to 15% of their monthly premium, which will be automatically deposited into their bank account or refunded to their credit card. Payments will take place in each month.
Farmer’s Insurance
Farmer’s isn’t offering refunds, just yet, but the company did announce plans to cut rates by 25% in April. The money, says the company, will automatically be refunded to customers.
Geico
Geico, also, is foregoing refunds, but will offer customers a 15% credit on their next full policy term. Using the national average listed above, that would work out to a $214 savings. The discount will be automatically applied at the next renewal cycle.
Liberty Mutual
Customers at Liberty Mutual will receive approximately $250 million in refunds in the form of a 15% rebate on two months of their premium, as of April 7. The money will be returned to either the bank account or credit card you made your last payment with (or via check, for people that didn’t use either). Refunds will come in the next few weeks, as soon as the company receives approval from state insurance regulators.
Nationwide
While other insurers are offering percentages of premiums, Nationwide is offering a blanket $50 refund per policy, as long as it was activated before March 31. (Nationwide says that is the equivalent of a 15% refund on the average policy.) The one-time refunds will be credited to the most recent method of payment within the next 30 days.
Progressive
Expect a 20% credit to your account for both April and May. And Progressive says it might offer additional credits in upcoming months, as the pandemic continues. Credits will be automatically calculated at the end of each month and either refunded or applied to any outstanding balance by the middle of the following month. (So April refunds should come in mid-May.
State Farm
On average, State Farm customers will see a 25% credit to their policy, the company says. It’s part of the company’s $2 billion initiative based around COVID-19. They’ll receive the dividend for the time period March 20 through May 31. And those will be applied against bills starting in June.
USAA
As part of a $520 million payout to members, USAA will offer a 20% credit on two months of premiums. That will be applied to the customer’s bill, effectively lowering rates at the renewal period.
More personal finance coverage from Coins2Day:
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—Who gets a stimulus check? Millions of tax-paying immigrants won’t
—What you should know about mortgage forbearance and skipping payments
—Everything you need to know about furloughs—and what they mean for workers
—The CARES Act allows for 401(k) no-penalty withdrawals
—Listen to Leadership Next, a Coins2Day podcast examining the evolving role of CEO
—VIDEO: 401(k) withdrawal penalties waived for anyone hurt by COVID-19
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