Dear Dr. Per Cap:
Yesterday I received a refund check from my auto insurance company due to the coronavirus. What exactly is the refund for?
Signed, Careful Cruiser
Dear Careful
You’re one of the lucky drivers who received a COVID-19 lockdown insurance refund. With all of the horrible news about the coronavirus, your shelter-in-place payback check is a welcome piece of good news. Turns out that with nearly everyone staying at home folks are driving a lot less these days. In fact Allstate, one insurance company sending out lockdown refunds, reports that mileage is down across the country as much as 50%. Geez, I miss my late night runs to Taco Bell!
Less driving means fewer accidents so many insurance companies are saving lots of money that would ordinarily go to paying auto claims – even a minor fender bender can result in a four figure settlement. As a token of good will and to help folks out during this rough patch, some companies are passing the savings on to customers.
If your auto insurance company decides to pay a lockdown refund, unfortunately not all have, expect a flat payment such as $50 per vehicle or 15% of monthly premiums in April and May. Not exactly a windfall, but every bit helps.
Not sure what to do with your lockdown refund? Think about filling up the tank for when things get moving again because cheap gas prices are another silver lining to the economic slowdown. As of April 27th the American Automobile Association reported that the national average people are paying at the pumps is $1.77 per gallon. Holy cow, I haven’t seen prices that low since they used to put toys in cereal boxes. Keep cruising safely!
Ask Dr. Per Cap is a program funded by First Nations Development Institute with assistance from the FINRA Investor Education Foundation. For more information, visit www.firstnations.org. To send a question to Dr. Per Cap, email askdrpercap@firstnations.org.