Insurance

Car Insurance Companies Are Under Renewed Pressure to Give COVID Discounts

Now that the legislation for President Joe Biden’s $1,400 stimulus checks is headed for a full vote in the House Representatives, consumer advocates are putting renewed ressure on auto insurance companies to provide some more stimulus cash of their own.

In a set of class actions lawsuit filed in Nevada on Feb. 23, plaintiffs claim that 10 leading auto insurers have kept premiums unreasoanbly hire during the pandemic, a period when restrictions on business activity and other parts of normal daily life have caused overall driving to drop 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.

Many insurers have already given customers some discounts on premiums, ranging from small one-time refunds to 15%-25% reductions on some 2020 monthly bills, according to information contained in the the Nevada lawsuits.

“On three occasions in 2020, USAA returned dividends totaling $1.07 billion to all auto insurance policy holders due to fewer drivers on the road because of the ongoing pandemic,” a spokesman for USAA, one of the defendants in the lawsuits, told The Associated Press.

Still, many Americans, not just those in Nevada, may be wondering: Why am I paying full price for insurance now, in 2021, when my car still sits in the driveway and my insurance company is still reaping the benefits?

Here’s how you can try to get more relief from your insurer, plus a few other strategies to slash that bill when money is tight.

Auto insurers thrive during the pandemic

Back in December 2020, 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 new 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.

The Nevada lawsuits — which name as defendants State Farm, USAA, Geico, Acuity, Liberty Mutual, Farmers, Progressive, Travelers, Nationwide and Allstate — contend that the trend has continued into 2021.

So can I get free money from my insurance company?

Joseph Tanner

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