Coronavirus Car Insurance Refund [Which Companies? 2020]

Companies are issuing over $4 billion dollars as coronavirus car insurance refunds. You may find a credit on an upcoming car insurance statement since coronavirus car insurance refunds are becoming more common.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State...

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UPDATED: May 26, 2020

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Here's what you need to know...

  • Fewer people are driving, which means fewer car accidents
  • Many major auto insurers are refunding or crediting a portion of drivers’ premiums

There can be no denying that the novel coronavirus that causes COVID-19 has made a massive impact on our lives. Everybody is being affected, from lost jobs and income to cabin fever and the mental health issues that can be exacerbated by it. Since people have been spending more time at home, there has been a big decline in traffic on the roads and therefore fewer car crashes.

Many of the top car insurance companies are issuing coronavirus car insurance refunds or credits, and more are expected to follow suit. Let’s take a look at why and see which companies are instituting these practices.

You can see which companies will give you the best rates during the pandemic simply by entering your ZIP code above now.

Why are car insurance companies refunding premiums because of the coronavirus?

According to John Hopkins University, COVID-19 deaths are doubling every three days in the U.S.

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These numbers are bleak, but more people are working from home when possible and practicing CDC recommendations to prevent spread so that we can flatten the curve. If you’re considered essential or have been out for supplies in the past few weeks, you’ve probably noticed traffic is lighter than normal.

Streetlight Data has compiled a map to see how traffic, in regards to vehicle miles traveled, has changed since the beginning of the COVID-19 crisis. Two of the areas hit hardest by the coronavirus are New York City and San Francisco, which have seen a decrease in vehicle miles traveled of 92 percent and 87 percent, respectively.

Obviously, with less traffic on the roads, there will be fewer auto accidents, as seen in this article about the 10 Benefits of the Coronavirus Pandemic. Yahoo News interviewed Warren Buffet— who is the CEO of Geico’s parent company Berkshire Hathaway— and you can see they have noticed a big drop off in insurance claims because of fewer drivers on the road.

On March 18, the Consumer Federation of America (CFA) released a letter urging auto insurers to provide premium offset payments for their drivers who have experienced a decline in how much they drive that will likely continue for a while.

The Consumer Federation of California Education Foundation(CFC) also released a petition noting that the decrease in traffic does not correlate to how much insurers are raking in from reduced accident claims.

Essentially, these say that the high premiums customers have been paying are no longer directly in correlation to the miles they’re driving. It doesn’t make sense from a risk perspective, and the insurers could be pocketing the cash that would have otherwise been paid out in claims.

Most car insurance companies are already making flexible arrangements for customers, including no late payments and no suspensions for non-payment. But what are they going to do about the rate disparity?

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Which car insurance companies are giving money back for driving less during COVID-19?

So far, several insurers have announced plans to refund or credit accounts due to this massive decrease in overall driving and auto accidents across the country.

Insurers giving COVID-19 refunds
CompanyAmount refundedMethod of Refund
Allstate (including Esurance, and Encompass)15% of April and May premiums
($600 million total)
Option of either credit or cash refund
American Family (AmFam)$50 per vehicle
($200 million total)
Paper check
Farmers25% of April premiumsCredit
Geico15% at renewal, an average of $150 per auto policy
($2.5 billion total)
Credit
Liberty Mutual & Safeco15% for two months of premiums
($250 million total)
Option of either credit or cash refund
Nationwide$50 per policyCash
Progressive20% for April and May premiumsCredit
State Farm25% of premium between March 20 and May 31Credit
Travelers15% for April and May's premiumsCredit
USAA20% for two months of premiums
($520 million total)
Credit

Many other major insurers have specified that they have announcements in regard to this coming soon, but let’s see what’s come out so far.

How is Allstate refunding drivers due to COVID-19?

Allstate has announced their Shelter-in-Place Payback. What will that mean for you if you have Allstate? Allstate, Esurance, and Encompass — the latter two of which are subsidiaries of Allstate — will be returning over $600 million to its auto insurance customers who have been driving less frequently since the COVID-19 crisis began.

Allstate customers will receive an average of 15 percent of their monthly premiums back for the months of April and May. This will automatically be deposited into the account you typically use for payment, or you can get a bill credit for the amount. You can also get the payment through the Allstate mobile app.

Allstate is also providing its Identity Protection for April and May for free, but you do have to sign up for it. New and existing customers can take advantage of this.

How is American Family (AmFam) insurance refunding drivers due to COVID-19?

American Family car insurance, a Wisconsin-based insurer that serves 19 states, has announced they’ll also be returning a portion of auto insurance premiums — about $200 million worth in total.

For American Family drivers, this is going to show up as a one-time $50 credit for each vehicle you have insured with them.

Physical checks will be mailed out to each customer.

What is Farmers insurance doing to refund money to customers during COVID-19?

Farmers insurance is reducing April’s premiums, with a promise to keep an eye on how the situation evolves.

Farmers insurance is reducing their rates by 25 percent in the month of April. Customers don’t have to do anything extra, as it will automatically be applied.

How is Geico refunding drivers due to COVID-19?

Geico car insurance has also announced its plans to refund drivers during a time of low traffic.

However, Geico does not have a cash option. You will automatically receive a 15 percent credit to your account.

Geico announced that it expects these credits to average $150 for each auto insurance policy, and you do not need to do anything special to receive it as a customer. As the second-largest auto insurer in the country by market share, that’s expected to be around $2.5 billion in credits.

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How are Liberty Mutual and Safeco refunding drivers due to COVID-19?

If you’re a Liberty Mutual customer — or if you have Safeco, a subsidiary of Liberty Mutual — there’s no need to feel left out. The company announced a Personal Auto Customer Relief Refund related to COVID-19. Liberty Mutual expects to return about $250 million to its customers.

Liberty Mutual and Safeco drivers will get a 15 percent refund on two months of their premiums. You’ll either get a check or you may choose to receive it through the same route as your most recent payment, e.g. your checking account or debit card.

These payments will be automatic without any necessary steps on your part.

What is Nationwide doing to refund money to customers during COVID-19?

Nationwide announced their own refund policy on the same day as State Farm.

Drivers will receive a $50 cash refund for each policy to the most recenty used method of payment on the account.

This will be returned within 30 days of the announcement on April 9th.

How is Progressive refunding customers during this time?

If you’re an existing Progressive customer, you will receive a 20 percent credit back for both April and May.

Progressive notes that they may offer additional credits in the upcoming months.

What kind of refund is State Farm offering during COVID-19?

State Farm took a little longer than other insurers, but they watched the situation and announced their refund on April 9th.

On average, State Farm customers will see a 25 percent refund to their policies for the time period between March 20th and May 31st.

This will be returned as a credit, with an average of 25 percent for each customer that will vary by state.

What is Travelers doing to refund customers during the coronavirus pandemic?

Travelers just released information on their own Stay-At-Home Auto Premium Credit Program.

Traveler’s giveback program will return 15 percent of April and May’s premiums. There is no cash option, and Travelers customers will receive this credit automatically.

This applies to each policy, regardless of how many drivers are included on it.

How is USAA offering refunds to drivers during COVID-19?

USAA is going to give back $520 million to its customer base.

USAA, which is only available to military personnel and their families, is giving back 20 percent of premiums over two months.

There will be no cash option, and the credit will automatically be applied to USAA members’ accounts.

You can expect some of the other major insurers to follow suit within the next couple of weeks with payback plans of their own. State Farm has already said it’s mulling over how best to process refunds.

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Number of people currently confirmed to have COVID-19, in the US
Number of people currently confirmed to have COVID-19, in the US