With recent social distancing, travel restrictions, and employment changes, you may be adjusting your driving habits and looking for ways to save on your auto insurance. Here are answers to common questions about auto insurance and COVID-19.
Should I cancel my car insurance if I’m not driving my car due to COVID-19?
This may seem like a tempting option to save money on your insurance. However, we do not recommend cancelling coverage. If your vehicle is not insured and is damaged by something such as fire, vandalism, or theft, you will be left to cover the costs on your own. Canceling your insurance will also create a “coverage gap,” which insurers see as a higher risk, resulting in higher rates in the future.
A safer option would be to take all coverage off the car except comprehensive coverage. This will protect the car if it is damaged while not being driven. This alone can result in significant savings. Just don’t forget to reactivate the coverage when you are ready to drive again.
Should I lower my auto coverage because I’m driving less due to COVID-19?
If your driving habits have changed because of COVID-19, contact your insurance agent to discuss your options. Different states require different levels of mandatory insurance coverage. If you need to cut expenses temporarily, you can switch to the lowest coverage required in your state. However, keep in mind, if you are in an accident you may be left paying more out of pocket if the damages exceed the amount of coverage you have.
You can save some extra money by waiving rental reimbursement and towing coverage. This could be a good idea if you are using public transportation and/or already have a new car roadside assistance plan. If you are not doing so already, you can save by insuring all your vehicles on the same policy and by bundling car and home insurance with the same carrier.
Can auto insurance be temporarily suspended?
It is possible for automobile insurance to be temporarily suspended. This action is typically only used if a car cannot be accessed for long periods of time – such as military deployment.
If your insurance provider allows you to suspend your vehicle coverage, make sure you understand and consider all the risks. Accidents can still happen when your car is parked in the driveway, such as a falling branch, a hit and run, fire, vandalism, or theft. Suspension should only be considered if you absolutely will not be driving the vehicle for a period of time. Coverage should be reinstated before you start driving again.
I have a new job doing deliveries. Does this affect my insurance coverage on my vehicle?
During this time, many people have found work as delivery drivers. If you are in this situation, this new change in employment could affect your car insurance. If you do not tell your insurance company you have started to make deliveries with your vehicle and you get into an accident, you could potentially face a claim denial.
Some car insurance companies are responding to the COVID-19 pandemic by extending insurance coverage to customers using their personal vehicles to make deliveries. If you are using your personal vehicle to make deliveries for your employment, contact your insurance agent to ensure you have the right coverage.
Can I get a discount on my auto insurance if I am not driving my car as often as usual?
In reaction to COVID-19 and the impact it has had on the amount people are traveling, many insurance companies are offering discounts and partial premium refunds.
Other ways to save on car insurance include a possible usage-based discount for driving less. Use-based insurance (UBI), also known as pay as you drive, can be a good solution in specific situations. With UBI, an insurance company calculates premium based on driving behavior as tracked by a telematics device installed in your vehicle or an app on your smartphone. The telematics device or app measure metrics of driving habits, such as driving speed, miles driven, and hard-braking incidents.
Use-based insurance is not a guarantee of lower rates; in fact, some carriers may have a surcharge for bad driving. However, in our current climate, this could be a good solution to consider. Contact your insurance advisor to learn more.
What should I do if I am not able to make my insurance payment?
If you find yourself in a temporary financial emergency and are unable to make your insurance payment, contact your agent about the possibility of changing your payment due date or your pay plan on a temporary basis. Many insurance providers are offering extended grace periods and other payment options during this time if you cannot currently afford your premium.