Driving less during coronavirus outbreak? Ask your car insurance company for a discount


If you’re driving less because of the coronavirus — and who isn’t — you might be able to get a discount on your auto insurance premiums, just by asking your company for one.

In California, your safety record, miles driven and years of driving experience, in that order, must be the top three factors that go into your auto premium. Because of this, drivers in California get the biggest savings when they drive less, according to a survey published in 2018 by the Consumer Federation of America.

Allstate, California’s fourth-largest auto insurer, said on Monday that it plans to give most auto policy customers nationwide a “shelter-in-place payback” equal to 15% of their April and May premiums. It’s working with state insurance regulators “to move forward expeditiously,” Allstate said in a press release. Customers will receive the money back through a credit to their bank account, credit card or Allstate account.

American Family Insurance said it will give customers a one-time refund of $50 for each car it covers. Next Insurance, which caters to small businesses, told customers it is reducing their April general liability and commercial auto premiums by 25%, to help them cope with the coronavirus crisis.

On March 24, the Consumer Federation of California Education Foundation filed a petition asking state Insurance Commissioner Ricardo Lara to require insurers to immediately let customers know they could be entitled to a rate cut if their mileage is reduced because of unemployment or stay-at-home orders. Longer term, it asked Lara to begin a rule-making proceeding that “could empower the commissioner to order rate cuts in this or similar emergencies that reduce driving on a widespread basis,” said Richard Holober, the federation’s president.

The 2018 study compared premiums in 12 cities nationwide and found that only in Los Angeles did drivers see “consistent savings for lower mileage driving.” In Los Angeles, premiums dropped by an average of 8.7% for every reduction of 5,000 miles per year. Very low-mileage drivers (2,500 per year) paid an average of 30% less than very high-mileage drivers (22,500 per year).

Outside of California, drivers saved only 1.6% on average for every 5,000 mile reduction, and very low mileage drivers paid only 6% a year less than the road warriors.

Allstate’s proposed 15% rate reduction “is still on the low end of what’s due, but in the midst of a crisis, it’s a good start,” said Douglas Heller, the California federation’s insurance expert.

The California insurance department said it is reviewing Allstate’s rate filing for a 15% premium discount to determine if it needs the department’s approval. In a statement, Lara said, “I applaud Allstate’s move” and called it “a step in the right direction.”

Identifying myself only as a customer, I called my own insurance company this week to ask about a rate reduction, since my spouse and I now working from home. It agreed to reduce our premium starting the next day until our policy renews in August. The refund we are getting represents 27% of our six-month premium, but had it started in February, at the beginning of the six-month billing period, it would have amounted to 34% of the premium.

What anyone else might get depends on a host of factors, including their mileage before and after they were forced to stay home. Although Proposition 103 requires that safety record, mileage, and driving experience have the greatest influence on auto premiums in California, insurers may consider a host of lesser factors including the customer’s age, location, marital status, vehicle age and type, coverages chosen, deductibles, and multi-line, good student and loyalty discounts, said Janet Ruiz, a spokeswoman for the Insurance Information Institute, a trade group.

Ruiz said customers should call their insurance company and inquire about a discount.

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