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Car Insurance During COVID-19: Discounts, Rebates, and Refunds

Unless you work in an “essential business,” you’re probably spending a lot less time on the road—whether you use your personal vehicle for business or have a dedicated work vehicle. Does that mean your auto insurance rates should be lower?

Many of the largest insurance carriers in the U.S. say yes.

Coronavirus auto insurance discounts

Most of the major auto insurance carriers have announced “payback” plans for customers who are sheltering in place due to the COVID-19 pandemic and are no longer driving to and from work.

Some of the relief programs mentioned below apply only to personal auto insurance policies. However, they should still benefit small business owners who use their personal vehicle for work.

  • Allstate announced they will give customers 15 percent back based on their premiums for April and May. The funds will automatically be deposited back to the bank or credit card used for the customer’s most recent payment or apply credits to accounts.

  • American Family is offering a one-time payment of $50 for each personal vehicle insured with them.

  • Chubb is providing its personal auto insurance clients a 35 percent premium reduction for April and May. It’s also giving U.S. small business clients whose policies renew from April through August an automatic 15 percent reduction in premiums for their commercial auto insurance.

  • Farmers will reduce auto insurance premiums by 25 percent, but only for one month. The credit will be applied automatically to an upcoming billing statement or refunded to the bank or credit card account on file if the customer paid their account balance in full.

  • GEICO is offering credits of 15 percent of the customer’s next six-month policy term for all auto, motorcycle, and RV policyholders as the policies come up for renewal.

  • Hartford will issue refunds worth “about 15 percent” of April and May premiums to personal auto insurance customers

  • Liberty Mutual is giving personal auto insurance customers a 15 percent refund on two months of their auto insurance premium, based on the premium amount as of April 7, 2020. The refund will be issued in the manner customers made their most recent payment, or by check.

  • Nationwide will issue a one-time premium refund of $50 per policy for all personal auto policies active as of March 31, 2020.

  • Progressive is giving personal auto policyholders a credit of 20 percent of their April or May premiums. The credit will be applied to any outstanding balance or next bill or refunded if the policy has already been paid in full. Commercial customers with a business owner or general liability policy will get a 20% credit on April and May monthly premiums.

  • State Farm is giving its auto insurance customers a credit of “about 25 percent” of their premium for March 20 to the end of May—exact percentages will vary by state. Customers will receive credits applied against bills beginning as early as June.

  • Travelers is giving personal auto insurance customers a 15 percent credit on April and May auto insurance premiums, rebated in the form of account credits.

  • USAA is giving every member with an auto insurance policy in effect as of March 31, 2020, a 20 percent credit on two months of premiums. The credit will automatically be applied to customers’ bills.

How to ask your insurance carrier for a refund

Don’t see your insurance carrier on the list? Check the company’s website to see if they’ve announced refunds. If your company hasn’t made an official announcement, you might have some options.

  1. Ask your carrier to re-rate your policy. Typically, the fewer miles you drive annually, the lower your auto insurance rates. If you’ve had a significant drop in mileage, call your insurance company and ask to have your policy re-rated based on lower mileage. If, for example, you typically drive 50 miles per day but are now working from home, your carrier may be able to recalculate your premium based on lower annual mileage.

  2. Modify coverage on your vehicle. If you aren’t driving your car at all and it’s just parked in your garage, you may be able to drop or reduce coverage to the minimums required by state law. For example, if you’re currently carrying $100,000 of liability insurance, and your state only requires $15,000, you could lower your limits to save money. You could also consider dropping collision coverage and just keep comprehensive coverage, which covers the vehicle if it’s stolen or damaged by something other than a collision. This is only a good option if you aren’t driving the vehicle at all because you have another car available for running errands, etc.

  3. Increase your deductible. Your car insurance deductible is the amount of money you have to pay for car repairs or replacement after a covered claim. Then your insurance company pays the balance, up to your policy coverage limit. Deductibles typically run anywhere from $250 to $1,000, although some companies offer deductibles as high as $2,500. If you have a low deductible but aren’t driving your vehicle much or at all, you might consider increasing your deductible to $1,000 or $2,500 to reduce your monthly premium. Just keep in mind, if your vehicle is stolen or damaged, you’ll have to pay more out of pocket to repair or replace it.

  4. Shop around. If your carrier isn’t offering discounts and isn’t willing to modify your policy, you might want to shop around for another insurer offering better rates or discounts. You can get an idea of how much you may be able to save by using the auto insurance calculator from ValChoice.

If you aren’t driving, it might be tempting to simply let your insurance policy lapse, but that could end up costing you more down the road. Many states penalize car owners who let their coverage lapse, and some insurance companies charge higher rates to people who’ve had a gap in coverage. In that case, the money you save for the month or two you’re not driving could be lost when you try to get insurance again.

Many insurance companies are delaying cancellations and working with policyholders having financial problems due to COVID-19. If you can’t pay your premium, call your insurance company to discuss your options.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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