With fewer drivers on the road over the last few months of social distancing, many car insurance companies are issuing refunds of the premiums paid by policyholders. These refunds vary for each insurance company and tend to fall between 10-30% of the insurance premium over a 1-3 month period.
Social distancing and mandated shutdowns in certain industries have resulted in fewer drivers on the road and, by extension, fewer insurance claims. Simply put, if we aren’t getting into car accidents, our car insurance companies don’t have as many insurance claims to settle. Additionally, consumers have been looking to cut expenses wherever possible while faced with salary cuts, layoffs and delays in unemployment payments. Car insurance seems to be falling on the list of importance for many of those who are no longer making their daily commutes. By issuing these refunds, many insurance carriers are also able to keep policies active when they may have been cancelled by the policyholder.
Many consumers have already received their refund, and there is speculation if there will be another round of refunds issued as many industries are still working remotely or not running at all.
WHAT YOU NEED TO DO
Most insurance carriers are issuing these refunds automatically in the form of a credit to the most recent payment method or paper check. For many families, this extra money is helping to fill in the gaps left by financial hardships caused by the COVID-19 pandemic.
If you have not yet received your refund, or have questions about your policy, you should first call your insurance agent to get the most up to date information for your specific policy. And while you’re on the phone with your agent, this is a great time to review your insurance coverage to make sure your current policy protects you, your family and your assets in the event of an accident or injury. This is particularly important if you are driving less, have added or removed vehicles or permissive drivers, or have other concerns with your insurance coverage. The time to review your coverage is now, not after an accident happens.
Alynnah Satterfield – Personal Injury Paralegal