When people were told to stay home in the early days of the COVID-19 pandemic last year, people stopped driving suddenly. There were fewer cars on the road, which meant the chances of accidents occurring were lower, and there was less chance of insurance claims.
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Auto Insurance Refund Due to COVID-19
So, insurance companies were happy to announce that they would be refunded 15-25% of some of the premiums due to the COVID-19 pandemic. However, the consumer-protection advocacy group U.S. PIRG studies show billions of policyholders did not receive their refund. So, the Public Interest Research Group (PIRG) of the U.S. suggested that state governments mandate refunds for these overpayments. If you had auto insurance during the pandemic, you might have received a refund from your insurance company.
But consumer advocacy groups now say it wasn’t enough because the Consumer Federation of America and the Center for Economic Justice declared that the auto insurance industries kept $30 billion in the pandemic, which should have gone back to policyholders.
J. Robert Hunter, the Consumer Federation of America’s director of insurance, said:
“In virtually every state, auto insurance premiums – by law – cannot be excessive. The inability or unwillingness of almost all state insurance regulators to enforce the law and protect consumers raises serious questions.”
However, the trade group says insurers did nothing wrong, and the American Property Casualty Insurance Association, a major trade group for insurers, said the consumer groups’ analysis is flawed. Because the association said that what the advocates call “profit” is actually money used to “handle claims, sell and service policies, pay taxes, and regulatory fees.”
Now, the association noted that driving conditions have changed since the early days of the and cars are being driven like they were before the pandemic.
While drivers are still required to carry car insurance in 48 states, millions of Americans are following orders to stay at home and cut down on driving, so they feel they do not need that protection.
Which car insurers are giving back money to their policyholders?
According to ValuePenguin, the following insurers refunded their policyholders.
• American Family refunded $50 to all policyholders.
• Amica considered a 10% discount for monthly premiums over four months for customers who had a policy up until the end of 2020.
• GEICO credited 15% to six-month policies bought or renewed between April 8 – October 7 in the year 2020, or the ones on April 8, 2020, and April 7, 2021, for 12-month policies.
• Farm Bureau of Indiana refunded $20 per insured vehicle.
• Nationwide refunded $50 per policy.
• Plymouth Rock credited 25% to policyholders who follow stay-at-home guidelines.
How to save on car insurance during the COVID-19 pandemic?
It’s not advised to cancel your car insurance policy during the pandemic because having gaps in coverage have penalties. But you can:
- Compare and shop around for a good auto insurance policy.
- Look for pay-per-mile insurance.
- Don’t be cheap!! Add an appropriate amount of car insurance coverage to your policy.
- When your policy renewal date is near, call up your insurance providers and tell them that your mileage has gone down.
- Make sure you receive all possible discounts.
