Roads and highways that are normally clogged with traffic are sitting empty — or at least way emptier than usual — thanks to coronavirus-motivated shutdowns. People are either working from home or not working, and either way that means fewer cars on the road; commuting made up 28 percent of miles before the pandemic. Fewer cars mean fewer accidents—one expert says 85 percent might be a conservative estimate—which means fewer claims for car insurance companies to pay out.
Two such companies, Allstate, The United Services Automobile Association (USAA), and American Family Mutual, are returning some of the money they’ve saved due to the drop in accidents to their customers.
Allstate personal auto insurance customers will receive a 15 percent discount on their April and May monthly premiums. The “Shelter-in-Place Payback” will also be extended to policyholders with Esurance and Encompass, two brands owned by Allstate. In total, 18 million customers will receive $600 million in refunds.
Allstate also said that those experiencing financial hardship as a result of the coronavirus can delay two consecutive premium payments without penalty.
American Family Mutual, which operates in 19 states, is making a one-time payment to its customers, about $50 per insured car paid by check. That’s 2.3 million checks for about $200 million total, and the company says they’ll be printed and mailed within 60 days. Only those who had policies on March 11 — the date the World Health Organization officially declared COVID-19 a pandemic — will receive a refund.
The USAA will be returning $520 million to its members after data showed many of its members driving less during the shelter-in-place orders that have swept the country. Every member with an auto insurance policy in effect as of March 31 of this year will receive a 20 percent credit on two months of premiums in the upcoming weeks. This isn’t the first time USAA has done something like this: in 2019, it returned $2.4 billion to customers. Insured drivers with USAA don’t need to do anything; the credit will be automatically applied to their bills.
To be clear: the funds being paid back to customers are but a fraction of what these companies are saving on claims, and this move is clearly an effort to win some good PR in the midst of a crisis. But hey, it’s still some money back, and it’s likely that other insurance companies follow suit.
State Farm, the biggest auto insurer in the country, said it expects to make a decision on a potential refund of its own by Friday. Progressive said it is “exploring how to best return some premium to customers to reflect the decreased exposure that comes with less frequent driving during the pandemic and expect to have those plans in place soon.”
But regardless of how generous your auto insurer is, there is something you can do to save money while you’re not driving to work. Call your insurer and request that your policy change to personal use, which can save you a few bucks as you ride out the crisis at home.