Lowering Your Car Insurance Premium When You’re No Longer Driving Temporarily Due to COVID-19

Background

Lots of people haven’t driven their car in weeks as they are now working from home and getting their groceries delivered. We don’t know how long this will last, but it might last for another few weeks or more.

If you aren’t using your car, it would be nice to be able to get relief from those car insurance payments. Insurance companies don’t offer a ‘Pause’ button, so it’s not that simple. Cancelling your insurance completely could create a hassle when you want it back, plus potentially making your next policy more expensive. There might also be legal issues with having a car parked on the street which does not have insurance.

List Of Insurers

Some insurance issuers are offering various forms of relief:

  • 21st is giving a 25% reduction for April. (link)
  • AAA is sending out refund checks for 20% of the premium from March 16th – May 15th.
  • Allstate will give most customers 15% back on their monthly premium back in April and May, via a refund to their bank account, credit card or Allstate account. (link)
  •  American Family Insurance is sending back $50 per vehicle on the policy.
  • Amica will be crediting 20% for April and May.
  • Auto-Owners is giving back 15% for April and May premiums.
  • Esurance will give most customers 15% back on their monthly premium back in April and May, via a refund to their bank account, credit card or Allstate account. (link)
  • Farmer’s is returning 25% of April’s premium.
  • Geico is giving customers a 15% discount on their renewal between April 8 and October 7, 2020. (link) [There have also been reports in the comments of getting discounts for calling in and requesting a discount based on work-from-home or lower miles. Some are having success even now after GEICO announced their 15% across-the-board reduction.]
  • Liberty Mutual Insurance is reducing premiums by 15% for April and May.
  • MAPFRE is giving back 15% for April and May premiums.
  • Meemic is giving 20% reduction for 2 months of premiums.
  • Mercury is crediting back 15% for April and May premiums.
  • MetLife is crediting back automatically 15% of April and May.
  • Nationwide is refunding $50. (link)
  • NJM is crediting 15% of 3 months premium. (link)
  • Plymouth Rock customers will receive a 25% premium credit on Liability and Personal Injury Protection Coverages. An automatic credit will be applied to affected customers’ policies.
  • Progressive will credit 20% of your April premium in May and 20% of May in June. (link)
  • Statefarm is returning 25% on average. (link)
  • Traveler’s is sending back 15% for April and May. (link)
  • USAA will return 20% of 2 months worth of premiums. (Link) (Also, lowering mileage reportedly works to cut the premium.)

Add your experiences or knowledge in the comments and we’ll add it in here.

Updating Mileage & Use

Many readers have been able to reduce their insurance rates by updating their mileage usage with the insurer to reflect the lower number being used right now.

A similar thing is to update your info from having ‘commute’ as the primary use of vehicle to ‘pleasure’.

Car Storage

Multiple readers report that there’s a car ‘storage’ insurance option which can pause auto insurance. They might not refund the premium, rather use it as a credit toward the future; and they might not refund it in full. Regardless, if they have such an option it can be easy savings.

Geico and others seem to have this option, though some will tell you it’s only possible if you turn in your tags at the DMV. You can call your insurer and ask them if they have a storage option. Note: there’s likely a 30 day minimum when using the storage option; if you might need your car within 30 days this option won’t work.

Similarly, another reader reports getting their insurance mostly discounted with GEICO by getting an ‘Affidavit of non-use’. This requires a DMV notification, but it might not have the 30 day requirement.

Lower Coverage

Another option which one can employ is lowering your insurance coverage. You may be surprised to find that you can lower your policy to the minimum state requirement and save the majority of your premium, potentially savings hundreds of dollars. For example, you may have liability coverage of $100,000, and the legal minimum might be $15,000. You can also remove collision insurance entirely (something people with cheap cars do anyway) and some lots of cash. You should be able to adjust your insurance levels in your online login.

This way, you’ll retain the policy itself, just get some savings. Similarly, if you have two cars, but can make due with one for now, you can lower coverage on one, and make sure to only use that one until things get back to normal.

Notes:

  • While it makes sense to lower your collision and liability insurance, comprehensive coverage is for things like if a tree falls on your car, so you might want to keep that at regular levels (especially if your car is parked on the street).
  • Someone with a lease or a car loan might not be able to lower their insurance coverage.
  • My experience in the past has been that even prepaid car insurance can get refunded when you down-adjust your policy. The money should come back to your insurance account to offset a future payment, and you may be able to request a refund check/reversal as well.

Remove Driver

Another idea could be to remove one of the drivers on the policy. I’ve never done this myself, but I think (?) you’ll be keeping the policy intact, and can easily add/remove drivers at will to lock in some savings. This might work even for leased car or those with car loans.

Wrap Up

I think a lot of people can save real money with minimal time invested by simply lowering their coverage with the methods suggested. Likewise, the storage option and the mileage and usage update can lead to some nice savings.

Note: The tips above make sense for someone who will not be driving at all. If you still drive out occasionally, don’t remove or lower insurance and don’t use the storage option.

Ultimately, whether it’s worth dealing with this will depend how expensive your insurance policy is, how much time you have on your hands, and how long you expect not to driver at all.

Just set yourself a reminder to increase your protection before driving. You might put a note on the driver’s seat of the car, for example, to ensure you remember whenever it is that you venture out. It’s worth keeping a note of how you have it set up now so that when you’re back to driving you’ll have all of your ‘regular’ settings in-front of you without having to think through everything again.

Also, as a reminder, many companies will defer your payment obligations upon request. If you’re in a cash crunch now, try calling your auto insurer and see if they can do that for you. I believe some insurers are giving deferments of 60 days or the like.

(Disclaimer: I’m not an insurance expert, please do your own research. Maybe we’ll have some insurance experts who will chime in below.)

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Gadget - Bank Bonus Geek
Gadget - Bank Bonus Geek (@guest_1043674)
August 26, 2020 21:30

E-mail went out today from USAA.

Subj: Your Auto Policyholder Dividend Credit From USAA

Gist: You will receive an auto policyholder dividend equal to 10% of two months’ worth of auto insurance premiums. There is no need to call or take any action.

I like how they did a switcharoo, to make it look like the same discount, but only if you can’t read or do math. (Previously it was dividend equal to 20% of one month’s premium, back in May anyway) Not sure if other insurers are still doing anything, so guess take what you can get.

HarryTheFirstHarry
HarryTheFirstHarry (@guest_1043689)
August 26, 2020 22:12

For NJM it was 15% of 3 months premium in April and again 15% of 2 months premium in July. Take what you can get yes because there is no legislation on this. If they had included this – return of percentage of premiums in one of the COVID bills there would be more uniformity and probably more paid out, but oh well.

Gadget - Bank Bonus Geek
Gadget - Bank Bonus Geek (@guest_983821)
May 20, 2020 18:24

E-mail went out today from USAA.

Subj: Your Second Auto Policyholder Dividend Credit From USAA

Gist: “You will receive a second auto policyholder dividend equal to 20% of one month’s worth of auto insurance premium. There is no need to call or take any action.” The e-mail shows the dollar amount of the credit that is being applied.

HarryTheFirstHarry
HarryTheFirstHarry (@guest_983628)
May 20, 2020 13:04

Not sure where to post this as this is the only insurance related COVID post I found on doc so posting here: Amerihealth (Health Insurer in NJ) normally accepts only debit gift card premiums or checks and is now allowing credit card premium payments (Visa/MC/Disc) until 31 July 2020. For those paying high health insurance premiums this is at least $20 with a 2% CC for the 2 months premium.

HarryTheFirstHarry
HarryTheFirstHarry (@guest_986210)
May 25, 2020 10:15

Works with Amex too. Was able to use Amex offer for 5% back on insurance payments. And can split payments across multiple Amexes maximizing the insurance offer. yay!

HarryTheFirstHarry
HarryTheFirstHarry (@guest_1043692)
August 26, 2020 22:14

Still working!

Mark W
Mark W (@guest_978333)
May 12, 2020 18:01

Another DP for GEICO here. I just called in today (May 12) to tell them that I’m no longer commuting for work and this was a permanent change (which is true). They switched my vehicle into the “pleasure” category and that saved me almost $70 for my next 6-month renewal. I’m still getting the 15% GEICO Giveback on top of that.

Gadget 🕵️ Bank Bonus Geek
April 28, 2020 15:38

Today USAA sent out an e-mail stating the COVID-19 relief discount amount.

Subj: Your Auto Policyholder Dividend Credit From USAA

Dear Gadget,

One result of the COVID-19 pandemic is fewer drivers on the road and fewer accident claims, so we’re returning a portion of your premium to you. You will receive an auto policyholder dividend equal to 20% of two months of auto insurance premiums. There is no need to call or take any action. To keep it simple, the following amount will be credited to your next bill: $??

Less than $20 for me, and under $30 for S.O. USAA is already some of the lowest rates for “experienced/safe” drivers, so it’s not like I expected much.

Fred
Fred (@guest_967531)
April 29, 2020 15:04

Just got the same. Roughly 6.67% of my 6 month premium.

Gadget 🕵️ Bank Bonus Geek
April 29, 2020 15:55

I trust them to do the math on it. I had just lowered the annual mileage on both policies a couple of weeks ago… so not sure if that helped, hurt, or no change to the dividend credit. Mileage change lowered the overall bill a little going forward.

Fred
Fred (@guest_967580)
April 29, 2020 15:57

Mine was based on the original 6 month premium before I lowered my mileage.

LAG
LAG (@guest_966025)
April 27, 2020 17:05

 Chuck

Might not be all that useful since a lot of states are probably about to open back up, but for those that are still driving less and didn’t adjust your policy, it might still be worth adjusting your mileage or vehicle storage options to see if it stacks with the discount/credit being offered by many providers.

I just received an email from USAA confirming the amount of the 20% credit I will receive as a statement credit and it was based on my past months policy cost and not based on my future policy amount…

I adjusted my policy on 4/7 to store 1 vehicle and reduce mileage on the other and received a $200+ savings on the associated pro-rata cost of my 6 month policy. I did the math on the old policy cost vs the new reduced cost and it was an exact match to the old policy monthly cost x 20% x 2 (2 months credit advertised).

Hardik
Hardik (@guest_959726)
April 18, 2020 19:57

If you own multiple cars, has anyone tried a hybrid approach of insuring non-used cars on pay per mile and the main car on a normal auto policy?

KLUE
KLUE (@guest_959544)
April 18, 2020 13:05

I have 21st and they will reduce premiums by 25% for at least April. https://www.21st.com/covid-19-notice

TomJ
TomJ (@guest_959533)
April 18, 2020 12:47

Just 2-3 emails to GEICO and reducing the mileage to 2K on 2 cars, I got about 8% refund. My 6 month renewal from 3/12/20 to 9/12/20 was just paid in late February though.

Don L
Don L(@don-l)
April 18, 2020 08:16

Meemic Email:

Every policyholder with auto insurance in effect as of April 30, 2020, will receive a 20% policy refund of two months of premium