COVID-19’s effect on car insurance

COVID-19’s effect on car insurance

One of the impacts of COVID-19 pandemic is that many people have been forced to work from home as most of the country has been on some form of lockdown for the past year. With no commute to deal with, less miles are being driven, which, in turn means that there is less opportunity for accidents to occur. Additionally, other individuals have changed jobs or made career moves, and some have even left the workforce to stay home and care for family members. 

Early into the pandemic, many insurers acknowledged the fact that these changes had an effect on how often people drove their cars, and, as such, gave back to their policyholders by providing refunds and/or decreasing premiums.

However, you can go one step further by making adjustments to your policy, such as changing coverage, while you’re staying at home and driving less frequently. These adjustments can end up reducing car insurance rates and saving your money in the process.

Taking advantage of this time

In addition to the COVID-19 credits that insurers have already paid out to their customers, there are other ways that you can save money on your car insurance. The first step is to call your insurer and ask for discounts and possible changes to policy coverage to ensure that you’re getting the best price for your insurance.

If you’ve stopped commuting to and from your job or significantly reduced that amount of time you’re spending on the road, you’re going to lower your annual mileage. Therefore, you can request that your insurer reduce your annual mileage and/or make a change on your current policy to using your car for pleasure only.

Other insurance company discounts you may qualify for include:

  • Multiple-car
  • Multiple-policy
  • Payment options
  • New policy or loyalty discounts
  • Early signing
  • Group affiliations
  • Car safety and anti-theft
  • Defensive driving course
  • Good credit ratings

This may also be a good time to take a look at optional coverages such as collision and comprehensive coverage. If you make the decision to reduce coverage, make sure that any changes you’ve made won’t put you in a financial bind if you need to file a claim in the future.

Look into usage-based insurance options. Also referred to as pay-per-mile car insurance, these types of programs generally use an app or some type of device to monitor different metrics such as driving speed, miles driven, and hard-braking incidents. Your insurer will use this data to adjust your rates based on your actual driving.

The bottom line is that, if you’re working from home due to COVID-19, it makes good financial sense to review your car insurance for money-saving options.

Are you reviewing your insurance policies as often as you should?

It’s a good idea to review your insurance policies, including your car insurance coverage, at least once a year to ensure that you’re adequately protected. It’s a good practice to also review policies in case you’ve had an “insurance-qualifying” or significant life event; the COVID pandemic has certainly been a significant life-changing event for most of us!

Working with an insurance broker to find the best rates available can save you both time and money. Daniel Fraisse, independent insurance broker, provides car insurance services for every situation.