How Are Auto Insurance Companies Helping Consumers During the Coronavirus Pandemic?

In the midst of the COVID-19 coronavirus pandemic, people everywhere are being encouraged to stay home as much as possible, which has led to significantly reduced automotive traffic in the U.S. — but consumers are still paying for auto insurance despite driving far less. In response to this reduction in miles driven as well as accidents, many major auto insurance companies are taking measures to provide some relief to customers.

Common steps include payments to customers or credits to existing bills, as well as pausing cancellations and/or late fees. Some are even temporarily expanding coverage for personal vehicles used for commercial purposes. Here’s a list of major insurers and the steps they’ve announced, some of which are subject to regulatory approval:

AAA

AAA expects to refund auto insurance policyholders an estimated $285 million, amounting to a reported 20% premium refund.

“The refund comes in response to a reduction in miles driven and, as a result, an anticipated decrease in the number of insurance claims,” the roadside-services provider said in a statement.

Those covered by this refund are insured by The Auto Club Group, Motor Club Insurance Company in Rhode Island or CSAA Insurance group. The organization noted that “AAA insurers are independently operated, and timeframes and other details concerning the refund vary by insurer. To learn more about the refund, members can visit AAA.com.”

Allstate

Allstate will be offering partial refunds to customers for April and May, which it estimates will be roughly 15% of existing premiums. Customers may choose whether the refunds are automatically deposited into their payment accounts or applied as credit to future bills. The company is also offering a 60-day, penalty-free payment deferral plan by customer request and will “automatically cover customers who use their personal vehicles to deliver food, medicine and other goods for a commercial purpose during the COVID-19 emergency period.” The latter coverage applies for as long as an emergency order exists in the customer’s home state. These policies are also in place for Esurance customers.

American Family

American Family is providing customers with a one-time $50 payment in response to the current situation. The insurer says that this payment will not affect future insurance rates.

Farmers

Farmers is reducing auto insurance premiums by 25% for April, and it will make decisions about May and June premiums as the situation evolves. The money “will automatically come back to you,” Farmers CEO Jeff Dailey said in a video. Farmers also is pausing cancellations for nonpayment and extending the renewal period for expiring policies until at least May 1 (or later if required by a specific state) and waiving late fees, but customers will need to contact Farmers to take advantage of the renewal extension.

Geico

Geico is offering customers a one-time 15% refund on automotive and motorcycle insurance policies, and is also pausing nonpayment cancellations through at least April 30 (or longer depending on state-specific directives).

Liberty Mutual

Customers will receive 15% refunds issued either by check or “in the manner you made your most recent payment.” The insurer is also stopping late fees and has paused nonpayment cancellations until May 22 or later (per your home state). Payment relief is also available on a per-request basis. Appraisers are no longer conducting in-person visits to homes or repair shops except in “emergency situations.” Customers will need to submit photos online or via the Liberty Mutual smartphone app, the latter of which includes an “assisted-photo tool, which will show you step-by-step how to take damage photos.”

Progressive

Customers will receive 20% credits to their April and May bills, and cancellations and nonrenewals are paused through at least May 15. Like Allstate, Progressive is also automatically expanding coverage for customers using personal vehicles to deliver food or medicine. Progressive is also waiving late fees, expanding payment leniency and “pausing” collections, and deferring deductible payments for those who cannot currently afford to pay for car repairs out of pocket. Customers who are first responders will receive expanded roadside assistance benefits in the event of an accident (such as transportation to work or home), expedited tow service and repairs, vehicle pickup and delivery, as well as deferred deductible payment and a rental vehicle if necessary.

USAA

Customers with an auto insurance policy in place by March 31 will receive a 20% credit on two months’ worth of premiums. Cancellations and late fees are suspended through June 17, and payment and auto insurance coverage has been expanded “for members who use their personal vehicles to deliver food, medicine and other goods for commercial purposes.”

State Farm

A dividend totaling an estimated $2 billion will be shared among customers, with State Farm claiming that its customers will receive a credit worth an average 25% of their premiums for March 20 to May 31. The credit will be applied to bills “beginning as early as June.” Additionally, the company says it is encouraging customers “facing financial challenges to call their State Farm agent. Agents are working with State Farm customers one-on-one providing payment options.”

Travelers

With its Stay-at-Home Auto Premium Credit Program, Travelers will automatically apply a 15% credit on April and May premiums for its customers. Travelers also says it is “providing billing relief” through May 15 and covering those customers using personal vehicles to provide needed deliveries during the current emergency.

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