Key Highlights

  • With fewer people on the road during shelter-in-place ordinances, roads are safer and quieter and your auto insurer is saving/making money
  • Many auto insurers offering customer discounts as customers are filing many fewer claims
  • Some consumer advocates want auto insurers to do more

If ever there were a time to save money on your auto insurance, now is it.

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With shelter-in-place ordinances in effect throughout most of the country, Americans are driving much less, if at all. Roads are safer, quieter and car accidents (plus the insurance claims that go with them) are at an all-time low.

Shouldn’t your auto insurance premiums go down during this period when insurers are making more money since they’re not having to put out money to cover claims?

Some auto insurers are saying yes to this question. Here’s what some insurance companies are already doing:

  • Allstate is slashing its April and May premiums by 15%
  • American Family Insurance is returning $50/vehicle to its customers
  • Liberty Mutual is giving its customers 15% discounts on premiums for the next to months
  • USAA is giving its insurance holders 20% credit on two months of premiums
  • Geico is offering a credit of 15% for customers who renew their policies before October 7

Douglas Heller, an insurance expert at the Consumer Federation of America, said, “People aren’t driving. The math on this is not complicated. When our risk changes, our premiums should reflect that.”

Dan Karr, CEO of ValChoice, an analytics company that serves as a watchdog on the insurance industry, said that many companies, even those offering discounts, are still charging their customers, many of whom are newly unemployed and struggling financially, too much. With so many drivers not driving, Karr calculates that fewer auto accidents could push down insurance claims by more than 85%. With such a reduction in auto insurance claims, companies could save up to $100B.

“Profits are just going through the roof,” said Karr.

Notice that Nationwide and Progressive, two of the largest auto insurance companies in the country, are still not offering discounts to their customers.

If your auto insurer has yet to offer discounts to its customers, Karr suggests that you call them. Your call to your auto insurer may cause that company to have a change of heart.

But whatever you do, do NOT cancel your auto insurance altogether during this time of shelter-in-place and reduced/no driving. You’d likely be charged more when you re-establish your coverage AND you want to be insured during those rare times when you drive to the doctor or market as you’re sheltering.

Thanks to CNBC’s Annie Nova.

Also read: Podcast: The Coming Storm No One Is Warning You About, Will $2.2T CARE Act Sustain Economy or Are Relief Provisions Even Barely Enough?, Lenders Bracing for Biggest Wave of Delinquencies in History

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