More car insurance ‘stimulus checks’ are coming – should you get a refund?

More car insurance ‘stimulus checks’ are coming – should you get a refund?

While most people have given up on the prospect of more stimulus checks from Washington, some drivers are still finding money in the mail.

Insurance companies are in a rush for more money after offering drivers modest discounts and rebates last year.

And now another wave of refunds is coming to drivers after a governor accused insurance companies in his state of hoarding Billions in additional cash.

If you feel like you paid too much for your coverage, here’s how you might get a check — or at least get a break from your insurer.

Insurers explode for billions in the bank

Cars on the highway in traffic jam

ddisq / Shutterstock

In the latest assault on auto insurers’ deep pockets, Governor Gretchen Whitmer of Michigan has called for reimbursements of up to $675 per vehicle to be “promptly returned” to policyholders in her state.

“Billions of excess funds should not be held by insurers to invest for their benefit or be conditioned on policy renewal,” Whitmer wrote in a letter earlier this month.

The Michigan Catastrophic Claims Association is accused of holding $5 billion more than needed in a fund that reimburses insurers for expensive medical claims.

The insurance companies that make up the association quickly agreed to offer reimbursement — as required by law — though they are reluctant to do as the governor asks and distribute the entire surplus.

The law could only require them to offer refunds of $100, forcing drivers to look elsewhere for significant savings.

The siege continues across the country

Car with broken windshield

Pascal Vosicki/Shutterstock

Although this is not the case in Michigan, most complaints in other states are related to overloading during the pandemic.

When the streets were empty and accidents rare, Progressive reported an 82% increase in net income. Geico’s pretax profit tripled in the second and third quarters of 2020.

Insurers voluntarily reimbursed more than $14 billion last year, according to the American Property Casualty Insurance Association, but many critics are unhappy.

“On behalf of consumers, I am at my wit’s end,” California Insurance Commissioner Ricardo Lara wrote last month, giving three of the stingiest companies 30 days to “tell us once and for all how they are going to do it right.”

A state analysis found insurers refunded an average of 9% of auto premiums from March to September 2020, but the Department of Insurance estimates they should have refunded nearly double that amount.

Washington and New Mexico are also evaluating whether drivers have recovered enough money, and Massachusetts Attorney General Maura Healey has sent several pointed letters to the state’s insurance regulator. The dispute even ended in court, with class action lawsuits filed this year in Nevada and Illinois.

So can I get free money from my insurance company?

Man's hands holding piles of money in US five and twenty dollar bills

Amy K. Mitchell / Shutterstock

Unless more regulators step in or class action suits succeed, insurers won’t be forced by law to hand out more money than they already have.

Most of the rebates given last year were minimal; it was rare to recover more than half a month’s bonus. On average, according to advocacy groups, insurers misappropriated policyholders $125 per vehicle.

But some companies haven’t issued refunds or reduced fares at all unless customers call and ask.

If you haven’t contacted your insurer yet, you might have some free money waiting for you. And as the pressure mounts, your provider might be willing to review your premium, especially if you’re still driving less than you used to.

But if your insurance company refuses to give you a pandemic discount, there are several other ways you can try to lower your insurance bill:

Remove optional coverage

Some car insurance policies include extras that you may be able to 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 bucks. Just make sure you always meet your state’s minimum liability coverage and are protected in the event of an accident on those trips to the grocery store.

Change insurer

If your insurer won’t give you a break, you may be able to find a new one that will.

Drivers who haven’t done any comparison shopping in the past six months could overpay by more than $1,000 per year.

With a free quote comparison service, you could find a better price in just minutes.

What if I need even more savings?

sleeping man holding money hugging money in bed

Studio Prostock / Shutterstock

If saving on car insurance isn’t enough, here are some other ways to give your bank account a boost until the economy fully rebounds.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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