You are probably owed a “stimulus check” for auto insurance, according to lawsuit and critics
While the White House seems to have stopped considering the idea of a fourth stimulus check, you may be able to convince your auto insurance company to hand out COVID-19 money on its own.
Some providers who saw their profits soar during the Great Driving Slowdown of 2020 were already offering discounts and rebates to policyholders. Yet government officials, advocacy groups and a class action lawsuit argue it was not enough.
New analysis reveals insurers only returned one third of the extra money they made. That’s why critics are calling for billions of dollars in additional relief, even as insurers start to raise premiums again.
So if you start paying full price again while your car still spends most of the days in the driveway, here’s how you might get another discount from your insurer – plus a few other strategies to lower your monthly bill.
Traffic and recovery of premiums
At the worst of the pandemic, restrictions on business activities and other aspects of normal life have caused overall driving to drop well below pre-COVID levels, according to the United States Bureau of Transportation Statistics.
This meant fewer accidents and big profits for auto insurers. Progressive saw an 82% increase in net income, while Geico’s pre-tax profit tripled in the second and third quarters of 2020.
In gratitude, insurers voluntarily paid more than $ 14 billion in refunds and credits last year, according to the American Property Casualty Insurance Association (APCIA).
Today, the Great Slowdown seems to have ceased. Government data shows traffic returned to normal in the spring of 2021 – and in June, activity on the roads was 10-20% higher than before the start of the pandemic.
Keeping in mind, insurance premiums have also gone up. The consumer price index recorded six straight months of increases, finally ending in July.
State Farm, for example, has been approved to increase its premiums by about 4% in Louisiana, according to S&P Global Market Intelligence. He also filed increase requests in Arkansas, Connecticut, Georgia, Maine, Michigan, Pennsylvania, Virginia and West Virginia.
Insurers under siege
Even with the return to normal conditions on the roads, the fight still rages for the relief of auto insurance.
Earlier this month, the Consumer Federation of America and the Center for Economic Justice said insurers collected $ 42 billion in excess premiums last year while offering just $ 13 billion in discounts and discount.
“As we pointed out letter after letter to insurance regulators throughout 2020, it was clear that premium relief from insurers was woefully inadequate,” said J. Robert Hunter, director of insurance at the CFA, in a press release.
It was only in California that regulators really intervened. The state insurance commissioner ordered providers to extend more discounts in March, saying companies “continued to overcharge drivers.”
This does not mean that other states have remained silent. Washington and New Mexico are taking the first steps, and in Massachusetts, Attorney General Maura Healey has sent several pointed letters to the state’s insurance regulator.
The conflict even ended in court. In February, a series of class actions were filed in Nevada, with plaintiffs claiming that 10 major auto insurers were maintaining unreasonably high premiums. A similar class action lawsuit against Geico has been certified in Illinois.
For its part, the APCIA – the leading trade association for auto insurers – says the industry is “working to rebuild communities” and has denounced the Nevada class action as a “litigation profiteer.”
Can I get free money from my insurance company?
Unless more regulators step in or class actions are successful, insurers will not be required by law to distribute more money than they already have.
Most of the discounts given last year were minimal; it was rare to recover more than half a month’s bonus. On average, according to advocacy groups, insurers reduced policyholders by $ 125 per vehicle.
But some companies haven’t issued refunds or cut rates at all unless customers called and asked.
If you haven’t contacted your insurer yet, you may have some cash waiting for you. And with the growing pressure, your provider might be willing to revise your premium, especially if you’re still driving less than ever.
Take note of how your habits have changed, such as how far away you are not drive if you still work from home.
More ways to lower your premiums, today
If your insurance company doesn’t give you a pandemic discount, there are still a number of ways to lower your insurance bill.
Discontinuation of optional coverage
Some auto insurance policies include extras that you can do without for a while. For example, can you remove the option that pays for a rental car while yours is in the repair shop?
Removing these extras can save you a few dollars. Just make sure you still meet your state’s minimum liability coverage and are still protected in the event of an accident on those trips to the grocery store.
If your insurer doesn’t give you a break, you may be able to find a new one.
Even if you can’t switch to a company that offers pandemic discounts, finding the best rate can still help lower your bill.
If you haven’t done a price comparison in the past six months, you could pay more than $ 1,000 per year.
With a free quote comparison service, you can find the best price within minutes.
Suspend your auto insurance
In some cases, it may be possible to suspend your insurance if you have completely stopped driving during the pandemic.
This path can be tricky – it can result in fines or a suspension of DMV registration, and it may not be possible at all if you are making car payments to the bank.
You will also need to store your vehicle in a safe and secure place, as you will not be covered for non-driving losses, such as theft.
What if I need even more savings?
If saving on auto insurance isn’t enough, here are a few more ways you can give your bank account a boost until the economy fully bounces back.
Reduce your other insurance bills. By making a few simple comparisons using online tools, you can save hundreds of dollars on your home insurance and get an instant life insurance quote.
Invest your spare currency. Using a popular investing app, you can automatically invest the remaining “change” whenever you buy something with your debit card. The money goes into a diversified portfolio of stocks, bonds and other reliable investments. You won’t even notice the deposits, but you will notice the returns.
Reduce the cost of your debt. If you’ve relied on credit cards throughout the pandemic, high interest is sure to catch up with you. A low interest debt consolidation loan can consolidate your balances into one low interest payment and help you get debt free faster.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.