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HOW DOES CORONAVIRUS AFFECT YOUR CAR INSURANCE PAYMENT?

By Eddie Tehrani On
June 8, 2020

Due to the pandemic, about 20% of cars on the road have dropped leading to a lowered risk of auto claims.


COVID-19 has affected billions of people worldwide. Financial security is a major concern for many people as 22 million people filed for unemployment in the last month as of April 16, 2020. The good news is that every major car insurance provider has pledged to help Americans in need.


Due to the pandemic, about 20% of cars on the road have dropped leading to a lowered risk of auto claims. Insurance companies are providing support by temporary payment extensions, putting a hold on policy terminations due to nonpayment, providing billing support, or providing rebates. Typically if you miss a car insurance payment, your insurance company can cancel your policy in seven to 10 days. Due to COVID-19, many companies have extended their grace periods for up to 60 days and will not cancel your policy due to non-payment.


Allstate has established “Shelter- In- Place Payback” which will allow policyholders to receive an average of “15 percent money back based on their monthly premium in April and May.” Payments will be directly deposited back into the account used to pay premiums.


Farmers is reducing all April auto insurance premiums by 25 percent for both Farmers and 21 Century branded policies. Customers will see a credit on their next billing statement.


Geico has also pledged to credit customers 15% on their next full policy term. For example, if your policy is $1,000 for 6 months, your credit will be $150 when you renew your policy. This will also be credited to any new policies purchased between April 8 and October 7, 2020.


Liberty Mutual customers will receive a 15% refund on two months of their auto premium based on their premium as of April 7, 2020. The refunds will be applied automatically.


Progressive will be offering customers who have active auto insurance policies a 20 percent credit at the end of April and May. The credits will be applied automatically.


State Farm stated that the average driver will see a 25 percent credit on their bill. The credits will be applied automatically.


To get an idea on what your insurance company is doing, we recommend contacting them to see what specific services they are offering. Canceling your car insurance should be your absolute last resort. If you drive your car without insurance, you could be subject to paying all property damage and medical payments if you get into an accident. You could also face fines and jail times for driving uninsured.


If you do happen to get into a car accident during this difficult time, do not hesitate to contact State Law Firm at 818-477-0773. We are always here for you.

 

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