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.)