Coronavirus Car Insurance Refunds: What You Need to Know

Consumers may not be aware that COVID-19 could have an affect on their car insurance premiums. Some consumers may be eligible to pursue a refund for these expenses.

How Does COVID-19 Affect Car Insurance?

Due to the coronavirus pandemic, consumers are driving less frequently, in addition to driving shorter distances. As many retailers, hotels, museums, and attractions are closed due to the virus, fewer consumers are traveling out of state or going on vacation. Many people are working from home, eliminating their daily commute. Some people even receive their groceries and necessities through delivery services, rather than driving themselves to the store to avoid contracting COVID-19. Consumers who find that they are paying high premiums despite not using their vehicles during this time may be wondering whether they are entitled to a coronavirus car insurance refund.

In late March 2020, car travel dropped by approximately 70%. While many major cities have seen car travel rates rise in the months following this extreme decrease, the total number of miles driven in the U.S. is still lower than it was in 2019. Due to the decrease in driving, some auto insurers have offered policyholders discounts or reimbursements on their car insurance premiums.

Which Auto Insurers Are Offering Coronavirus Car Insurance Refunds?

Several popular insurance companies have offered deals during the coronavirus pandemic, both to maintain existing customers and to entice new ones. However, although Allstate, Geico, and Progressive have offered rebates or other deals, some consumers claim that the companies could be doing more.

Allstate was the first major auto insurance provider to announce coronavirus car insurance refunds. In April, May, and June, Allstate offered policyholders a 15% rebate on monthly premiums. However, this offer has expired, leaving policyholders responsible for paying their entire premium for the rest of the year. Although Allstate claims that approximately $1 billion was returned to customers during this time, several lawsuits have been filed against the company by plaintiffs claiming that the insurer’s three months of refunds fell short of fair and reasonable compensation. These plaintiffs have pointed out that other insurers, such as State Farm, offered customers approximately 25% back on their premiums. Additionally, these offers expired after a few months, offering policyholders only a brief respite.

Insurance company Esurance also offered customers only 15% back in coronavirus car insurance refunds. Progressive offered 20%, but only for the months of April and May. No matter which car insurance provider through which you purchase your auto insurance, it is likely that the company only offered rebates or refunds for the first few months of the pandemic. For consumers who are still not using their vehicles as often as they used to, these high premium payments may be adding up.

In addition to the lawsuits against Allstate, consumers have also filed class action lawsuits against Esurance and Progressive. The plaintiffs in some of these cases claim that insurance companies have made significant profits off of these payments, while rarely having to pay out for car accidents and other claims. As fewer people are out on the roads, fewer accidents may be occurring, allowing insurance companies to collect a profit on premiums rather than returning this money to policyholders who file claims. According to them, the insurance companies may be violating consumer protection laws and engaging in deceptive or predatory actions against consumers.

If you have not been given a refund or rebate by your car insurance company, you may be able to speak with an experienced attorney about the legal avenues available to you. Some consumers may be able to pursue coronavirus car insurance refunds through a class action lawsuit against their insurer.