Auto Insurance

More Than 80% Who Asked Car Insurer For Financial Help Were Successful -- But Too Few Consumers Are Making This Request

More Than 80% Who Asked Car Insurer For Financial Help Were Successful -- But Too Few Consumers Are Making This Request

Auto insurance companies are giving credit or refunds to their policyholders during the COVID-19 pandemic. But consumers who need more financial help should take advantage of the various forms of assistance that may be available from their insurer.
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Empty highway Source: Getty Images

Major insurance companies across the country have made headlines by refunding premiums or granting credits to their customers as driving levels have dropped precipitously during the COVID-19 pandemic; 67% of drivers tell ValuePenguin they are driving significantly less than normal.

But insurance companies are providing many forms of financial assistance to their customers, and drivers aren't taking full advantage of it.

Key findings:

  • Just 31% of consumers have asked their auto insurer for financial assistance, but those who have are reaping the benefits: 80% of them were successful.
  • This high level of success was consistent across different types of financial assistance including payment extensions, discounts, refunds and waived late fees.
  • Nearly half of surveyed consumers — 49% — received discounts of 11% to 25% on car insurance, matching the promises of many insurers in their public pledges to reduce rates.
  • The main impediment stopping consumers from asking their insurer for financial help? Lack of awareness — 39% didn't know it was an option.
  • Though it was rare for consumers to ask for financial assistance, men were much more likely to ask than women. As much as 18% of men asked their insurer for a discount, compared to 9% of women, and 22% of men asked for a payment extension compared to 13% of women.
  • Another reason consumers aren't asking for financial assistance? They're not yet feeling a financial crunch. Among respondents, 28% said they did not ask for help because their finances weren't impacted by the coronavirus, and another 30% said they can still make a payment even though their finances were impacted.

Only 31% of consumers have asked for financial assistance from their auto insurer, but more should

Insurance companies are offering several forms of assistance to their policyholders, but many drivers aren't taking advantage of them. Only 31% have asked for a form of financial help, which was defined in our survey as a discount, payment extension, waived late fee or a refund on a premium already paid.

The good news for unaware drivers is that many insurance companies are automatically returning funds to their customers in the form of refunds or credits. So regardless of whether they contact their insurer, policyholders may see a reimbursement in their bank account (if it's a refund) or on their policy bills (if it's a credit) in the coming months.

But companies are offering financial assistance beyond refunds and credits, such as payment extensions and waived late fees. And similarly to refunds, customers have been successful in obtaining assistance when they reach out.

Given the success rate, consumers who need financial assistance should definitely contact their insurers. Drivers may automatically receive the refund or credit, but they should double-check their insurer's policy on the matter.

Men are asking their insurers for financial assistance more than women are. And young drivers are asking at a higher rate than their older counterparts.

The willingness to ask for financial help from insurance companies was not consistent across age and gender. Men were much more likely to ask for financial assistance than women, and Gen Zers and millennials were much more likely to ask for assistance than Gen Xers, baby boomers or the silent generation.

Regardless of gender, men and women were equally successful in securing a discount — as long as they asked. Eighty percent of both men and women received a discount after asking their insurer, but half as many women asked as men.

The story is similar among generations. Gen Zers and boomers were the least successful in getting a discount after asking, but an overwhelming majority of them did: 75%.

Irrespective of your age or gender, you should contact your insurers about discounts or payment extensions, as our survey indicates there is no difference in success rate.

Our survey indicates insurance companies are honoring their refund pledges

By now, almost all major insurance companies have publicly pledged to provide financial assistance to their policyholders, and one of the main forms of help is premium credits or refunds. The most common givebacks resulting from the COVID-19 pandemic are credits or refunds of 15% applied to two months' worth of premiums, resulting in cheap car insurance for the near future, with the potential for further the savings depending on how long driving behavior is altered.

And our research indicates that these companies are living up to their promises among the individual consumers surveyed. Just about half (49%) of those surveyed said they are receiving a discount of 11% to 25%, matching the most common promise of insurance companies of 15%. Another 17% of drivers said their discounts ranged from 26% to 49%.

Methodology

ValuePenguin commissioned Qualtrics to conduct an online survey of 1,006 Americans who have auto insurance. The survey was fielded April 14–16, 2020.