State Farm, Nationwide, USAA latest to offer auto insurance relief in coronavirus lockdown

It has been a busy week in insurance: Here's where the big companies stand

As another week of U.S. stay-at-home orders passes, more major auto insurance companies have announced plans to refund small amounts of money to their customers due to the current lowered frequency of driving. State Farm, Nationwide, Liberty Mutual, USAA, Mercury, and Safeco will provide either a one-time flat-rate refund or a percentage of premiums will be automatically credited to customer accounts.

Nearly every big auto insurance firm has now launched relief programs in response to the effects of the coronavirus pandemic. Under guidelines to stay off the roads, save for essential trips, driving is significantly down and insurance companies are handling far fewer claims.

In today's updates:

  • State Farm declared it would provide an average credit of 25% on premiums from March 20 through May 31, though each state's percentages will vary. As the nation's largest auto insurer, State Farm estimates this relief package will cost the company about $2 billion, though that figure likely doesn't take into account the money it is saving from fewer claim payouts.
  • USAA, the country's fifth-largest property-casualty insurer, will offer a 20% credit on two months of premiums for customers with policies as of March 31. USAA's dividend is expected to add up to $520 million.
  • While the rest of the field is offering discounts and credits derived from percentages of premiums, Nationwide took a slightly different approach. Within the next 30 days, Nationwide will issue a one-time $50 refund to each active policy as of March 31. The amount is based on an average discount of 15 percent  and will automatically be issued to customers.
  • Mercury insurance will offer 15% credits for the months of April and May. Mercury only operates in 11 states, so its total is much lower at an estimated $65 million. 

Previously announced cuts:

  • Allstate and Geico will provide 15% discounts,
  • Progressive will give 20% discounts.
  • Farmers and 21st Century will give customers a 25% discount.
  • American Family Insurance said it's issuing $200 million in refunds or $50 for every car.
  • Liberty Mutual and Safeco customers will receive a 15% refund on two months of the annual premiums for customers who have policies as of April 7. Those refunds will start this month and will be sent as a check or through the method of the customer's most recent payment. Liberty Mutual says this will add up to approximately $250 million in discounts.

The months to which these discounts will be applied will vary by company, however. 

These packages come in addition to previously announced customer aid in the form of halted policy cancellations due to non-renewal or non-payment. For more information, call your local agent, or visit State Farm, USAA, Liberty Mutual (Safeco), Mercury, and Nationwide.


Share This Photo X