Yahoo Finance How to get another COVID 'stimulus check' from your car insurance company
Now that President-elect Joe Biden has announced his plan for a new round of $1,400 stimulus checks, consumer advocates are calling on auto insurance companies to provide some more stimulus cash of their own.
Many insurers already gave customers a temporary discount on premiums back in the spring, recognizing that Americans were suddenly driving less and auto accident rates were plummeting. That round of relief ended in May.
Since then, as regions across the country have continued to restrict business activity and other parts of daily life, overall driving is still well below pre-pandemic levels, according to Bureau of Transportation Statistics.
And that’s led to staggering increases in profits for auto insurers, according to research by consumer advocates. Progressive reported an 82% increase in net income, while Geico’s pre-tax earnings tripled during the second and third quarters of 2020, to give a couple of examples.
Americans might be wondering: Why am I once again paying full price for insurance while my car sits in the driveway and my insurance company is making piles of profits?
Here’s how you can try to get a second round of premium refunds, plus a few other strategies to slash that car insurance bill when money is tight.
Since then, as regions across the country have continued to restrict business activity and other parts of daily life, overall driving is still well below pre-pandemic levels, according to Bureau of Transportation Statistics.
And that’s led to staggering increases in profits for auto insurers, according to research by consumer advocates. Progressive reported an 82% increase in net income, while Geico’s pre-tax earnings tripled during the second and third quarters of 2020, just to name a couple.
Americans might be wondering: Why am I once again paying full price for insurance when my car sits in the driveway and my insurance company is posting record gains?
Here’s how you can try to get a second round of premium refunds, plus a few other strategies to slash expenses when money is tight.
Auto insurers thrive during the pandemic
The Consumer Federation of America and the Center for Economic Justice sent a public letter to state insurance commissioners, saying auto insurers should be required to deliver a second round of refunds to policyholders.
An analysis by the two groups showed crashes down 31% since the beginning of the pandemic compared to the year prior — with the trend expected to intensify as the virus further spins out of control this winter.
So can I get free money from my insurance company?
An analysis by the U.S. Public Interest Research Group Education Fund took a state-by-state look at how insurance companies repaid parked motorists last spring.
“Regardless how much each company profited, the majority of insurers didn’t give back more than half of one month’s premium,” the consumer watchdog says.
But some companies didn’t issue refunds or cut rates unless customers called and asked.
That means you could get free cash just by contacting your insurance agent. With pressure mounting, your insurer might be open to reviewing your premium, assuming you’re still driving less than ever. Make note of how your habits have changed, such as the distance you’re not driving while you work from home.
Other ways to shrink your premiums, starting today
If your insurance company won’t give you a pandemic discount, there are still a number of ways to cut down on your insurance bill.
Switching insurance providers
If your insurer won’t give you a break, maybe you can find a new one that will.
Even if you can’t switch to a company with pandemic discounts, shopping around for the best rate can still help you lower your bill.
If you haven’t comparison-shopped over the last six months, you could be wasting more than $1,000 per year. With a free quote-comparing service, you could find the best price in minutes.
Drop optional coverage
Some auto insurance policies include extras that you may be able to do without for a while. For example, can you cut out the option that pays for a rental car while yours is at the repair shop?
Removing these extras can save you a few bucks, just make sure you’re still meeting your state’s minimum liability coverage and are still protected in case of an accident during those few trips to the grocery store.
Raise your deductible
If the risks of a claim are lower, you may consider raising your deductible — that’s the amount you pay out of pocket on a claim before your insurer takes care of the rest.
A higher deductible will save you money on monthly premiums, but it could lead to more costs if you do end up in an accident.
Suspend your car insurance
In some cases it may be possible to put your insurance on hold if you’ve completely stopped driving during the pandemic.
This path could be tricky — it could result in fines or a suspended registration from the DMV, and it may not be possible at all if you’re making car payments to the bank.
You’ll also need to store your vehicle in a safe and secure spot, because you won’t have coverage from non-driving related losses, like theft.
Remember: There are always more ways to save money
If you can't squeeze anymore savings out of your auto insurer, look for other ways to cut expenses.
Save while you shop. Even when you're being cautious with your money, you can't avoid shopping for life's necessities. Luckily, you can download a free browser extension that instantly compares prices across the web and finds you the best deal. Also consider a cash-back app that will reward you with money every time you shop, dine or travel.
Save (and invest) your spare change. The mobile app Acorns automatically accumulates “change” — either by rounding up your purchases to the nearest dollar or by setting aside a small amount from your paycheck — and then instantly invests it. You won’t miss the change but you'll love the returns.
Make your savings work harder. You might be reluctant to invest your savings in the stock market, and that's understandable. But putting your money into a regular savings account, which could pay as little as 0.01% in annual interest, won't get you very far. The answer might be a high-yield savngs acount, which will pay a lot more than a traditional savings accounts. That way, your hard-earned savings can actually grow.
