While Washington has stopped considering the idea of a fourth stimulus check, advocates and at least one state are still pushing auto insurance companies to hand you COVID-19 money.
Some insurers paid discounts and rebates to policyholders when they reaped skyrocketing profits as Americans stayed more at home during the Great Driving Downturn of 2020. Yet government officials, advocacy groups and a class action lawsuit argue that was not enough.
If you’re paying full price, here’s how you might get another discount from your insurer – along with some other strategies to reduce your monthly bill.
This State is “at the end of its patience” with auto insurers
California’s Chief Insurance Officer recently issued a stern warning to three auto insurance companies: reimburse consumers for excess premiums since the start of the pandemic or face legal action.
Companies have one month to explain their plans, on the orders of Insurance Commissioner Ricardo Lara.
“On behalf of consumers, I am at the end of my patience,” Lara said in a statement. “These insurance companies have 30 days to tell us once and for all how they are going to fare before we take any further action.”
The insurers targeted by the order had the largest differences between the amount they reimbursed drivers and the amount they should have reimbursed, according to the insurance department.
The companies cover 1 in 5 California drivers: Allstate Northbrook Indemnity Co., Mercury Insurance Co., and CSAA Insurance Exchange.
State analysis found that insurers reimbursed an average of 9% of auto premiums from March to September 2020, but the Insurance Department estimates they should have reimbursed nearly double that amount – 17% – over the course of of the seven month period.
Auto insurers under siege for more discounts
At the worst of the pandemic, driving has fallen well below pre-COVID levels, which means 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.
But even as conditions on the roads return to normal, the fight continues for auto insurance relief to further claw back what California calls an undeserved windfall for businesses.
Beyond California’s order for more refunds, Washington and New Mexico are taking the first steps, and Massachusetts Attorney General Maura Healey has sent several pointed letters to the state’s insurance regulator.
The dispute ended in court with several class actions filed this year in Nevada and Illinois.
For its part, the American Property Casualty Insurance Association – the main professional association of auto insurers – 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 bypassed policyholders $ 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 free money waiting for you. And with increasing pressure, your provider might be willing to revise your premium, especially if you’re still driving less than ever.
If your insurance company doesn’t offer you a pandemic discount, there are several ways you can try 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 always meet your state’s minimum liability coverage and are 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. If you haven’t done a price comparison in the past six months, you could be paying more than $ 1,000 per year.
With a free quote comparison service, you can find the best price within minutes.
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 rebounds.
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 rid of debt faster.
Invest your spare currency. By using a popular investment app, you can automatically invest the “change” leftovers from daily purchases. The money goes into a diversified portfolio of stocks, bonds and other reliable investments. You won’t even notice the deposits as you build or complete your investment plan.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.