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Coronavirus: Car insurers like Allstate, Geico and Farmers are issuing refunds or policy rate cuts to drivers

Rate cuts are a valuable first step, but many drivers who are suddenly unemployed or working from home may find them inadequate.

SAN DIEGO COUNTY, Calif. — UPDATE: Since this story was first last week, more car insurance companies have issued refunds or policy rate cuts. 

This week, Auto Club announced $125 million in financial relief for policyholders. The insurance will also offer free roadside assistance for medical personnel and first responders.

The Auto Club stated that every policyholder with auto insurance in effect from March 16, 2020 to May 15, 2020 will receive a 20% policy refund check for this period. 

Policyholders can expect a mail refund check by the end of May. Members do not need to take any action to receive their refund. 

Nationwide last Thursday announced it would be providing a $50 premium  refund to personal auto customers. The refunds would automatically be credited to policy holders' method of payment. 

USAA also said it would return nearly $520 million to members. The credit will automatically be applied to customer bills.Every member with an auto insurance policy in effect as of March 31, 2020, will receive a 20% credit on two months of premiums in the coming weeks, according to USAA

ORIGINAL STORY BELOW
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Amid the coronavirus pandemic when drivers are staying home due to social distancing orders by health officials, car insurance companies like Allstate announced a 15% reduction in monthly automobile insurance premiums for the months of April and May.

Allstate said its Allstate Shelter-in-Place Payback would give customers more than $600 million in April and May.

"Allstate set a good example in returning to its customers some of its COVID-19 windfall profits. We call on all automobile insurers to reduce their premiums now, when tens of millions of drivers are out of work and facing unprecedented economic hardship," Richard Holober, CFC Foundation Director stated.

On March 24, the CFC Education Foundation called on insurance companies in California to reduce premiums for motorists who are idled under coronavirus stay at home orders. 

Under California regulations, when a driver reduces his or her mileage, he or she is entitled to premium reductions. Because of stay at home orders, the roads have been emptier and there have been fewer accidents, which could help produce additional rate cuts that could help drivers save some money during these hard economic times.

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Two smaller insurance carriers also announced COVID-19 rate cuts. American Family Insurance announced a $200 million nationwide rate cut for personal auto insurance policyholders, and Next Insurance, a commercial automobile insurance carrier, announced a temporary 25% rate cut. 

Two weeks ago, CFC Education Foundation filed a petition with the California Department of Insurance calling on the Insurance Commissioner to order all insurers to immediately inform their customers of the right to get a rate cut if their mileage is reduced due to skyrocketing unemployment or Stay at Home Orders. 

"Allstate set a good example in returning to its customers some of its COVID-19 windfall profits. We call on all automobile insurers to reduce their premiums now, when tens of millions of drivers are out of work and facing unprecedented economic hardship," Richard Holober, CFC Foundation Director stated. 

On Wednesday, Farmers and 21st Century also announced their branded auto customers will receive a 25% reduction in April premium to reflect the changed driving environment resulting from various stay-at-home guidelines issued across the country. 

The national insurer also said it was implementing flexible payment plans and a temporary pause on cancellations to help relieve some of the financial stress being felt by customers. 

“As we continue receiving updated information in the coming weeks, we’ll assess additional ways to take care of our customers,” said Jeff Dailey, chief executive officer of Farmers Insurance. 

Farmers and 21st Century customers will not need to take any action; however, should they have questions they can call Farmers at 888-327-6335 or 21st Century at 877-401-8181.

Geico also announced it would provide a 15% credit to auto and motorcycle policyholders when their policy comes up for renewal between April 8 and October 7, 2020. 

The credit would also be applied to any new policies purchased during this period. According to Geico, it expects credits to average about $150 per auto policy and $30 per motorcycle policy. 

Customers do not need to take any action to receive this credit.

Rate cuts are a valuable first step, but many drivers who are suddenly unemployed or working from home may find them inadequate.