The Coronavirus pandemic has fundamentally changed almost every aspect of our lives, whether directly or indirectly. Many Americans are still either unemployed or working from home and limiting how often they leave the house, which means they’re spending significantly less time on the road.
One survey of drivers showed that about 61 million Americans have stopped commuting to work, resulting in less traffic and fewer trips to the gas station. Things seem to be slowly turning around, though, with 26% of surveyed drivers reporting that they’ve returned to their regular commute as of August.
On the other hand, some people are actually driving more now — whether they’re commuting to avoid mass transit, taking road trips instead of flying, or driving for a delivery service to make up for lost income.
Everyone’s situation is different, but one thing’s for sure: these changes in driving habits have directly impacted car insurance. Both drivers and auto insurers have had to adjust their policies and procedures for these unique circumstances. Here are the main ways COVID-19 has changed car insurance in 2020:
Premiums & Discounts
Most car insurance companies announced premium relief programs in April when much of the country was under stay-at-home orders. This temporary relief came in the form of refunds or credits and was a direct result of fewer motorists on the roads. Even though most of the relief programs have expired, drivers may still be able to lower premiums using other methods.
If you’re driving considerably less, you should contact your insurance company to see if you can adjust the declared mileage on your policy. Whether they can adjust your mileage depends on the insurance company and if your situation is temporary or permanent. While miles driven is only one factor that determines your car insurance rate, every little bit helps.
If you don’t plan on returning to work anytime soon, you may be able to switch to a pay-per-mile policy. These insurance policies, ideal for people who rarely drive, were already becoming more popular in recent years. Companies like Geico and State Farm still don’t have pay-per-mile policies, but they offer low mileage discounts as part of their good driver programs.
Some auto insurers have extended coverage for policyholders who’ve started using their vehicles for commercial purposes, like delivering food and medicine. Usually, you’d need a commercial auto policy if you use your car for anything other than personal use. If you’re thinking about delivering food to make some extra cash, check with your insurance company before you start working. Should you get in an accident without the proper coverage in place, you could be on the hook for any repairs or medical bills.
If you’re no longer commuting, you may think you won’t need as much coverage, but accidents still happen. Some drivers are taking the gamble by raising their deductibles, lowering their insurance policy limits, or getting rid of specific coverage. Even if you’re a good driver with a perfect driving record, you never know what could happen. The entire point of having auto insurance is having peace of mind that you’re covered if something goes wrong.
You definitely shouldn’t cancel your comprehensive insurance policy just to save a few bucks. If you’re financing a new car, you’re required to have comprehensive in addition to bodily injury liability coverage and collision coverage. Even if you aren’t financing, it’s a good thing to have. Comprehensive insurance covers property damage from things like vandalism, theft, natural disasters, and wildfires. As we know, all of these can still happen during a pandemic — so don’t skip it.
Though cutting down to the bare minimum coverage may seem like an easy way to lower your premium, it comes with higher risk. Getting rid of things like gap insurance or extended warranties could leave you unprotected in the event of an accident or a total loss. The last thing you want to worry about right now is paying thousands of dollars in mechanic bills or medical expenses.
Instead of canceling essential policy items, talk to your insurance agent about other ways to achieve a lower premium. They can help you find discounts for things like being a good driver or student. Whatever you do, don’t cancel your car insurance because you aren’t driving much right now. Almost every state requires liability coverage, and uninsured drivers can face severe consequences — including fines, loss of license or registration, and even jail time in some states.
Late Fees & Policy Cancellations
It’s been a challenging year for a lot of people. We’ve seen massive layoffs and a spike in unemployment, and some are still struggling to pay the bills. Fortunately, most insurance companies understand these circumstances and have created programs to assist customers affected by the pandemic.
Usually, if you miss a payment on your car insurance premium, you only have a grace period of about seven days before your policy is terminated. Missed payments can also negatively impact your credit history, which takes time to turn back around. Not only that but if you have a lapse in auto insurance coverage, you’ll end up paying higher premiums in the future.
Most insurance companies are protecting their policyholders from this financial fallout by extending their grace periods and halting cancellations. Agents may be able to assist drivers with setting up unique payment plans. If you’re unable to make a payment due to COVID-19, you should contact your insurance agent for assistance before it’s past due.
Like most businesses, insurance companies have shifted away from in-person interactions during the pandemic. If you need to file a claim or speak with your insurance agent, you’ll most likely have to call or email. Larger companies may have long wait times, so you could be at an advantage if you go through a local insurance agent.
Though there may be some overall delays in the claims process, you’ll still be able to file a claim. Instead of an insurance adjuster coming out to inspect the damage, you may have to send your agent some photos and videos instead. Some insurers have set up online claim portals where you can upload accident photos and answer questions.
If you’re in the market for a new policy, you can search for auto insurance quotes online and compare average rates in your area. Check state laws regarding minimum coverage before you start looking for car insurance quotes. In addition to bodily injury and property damage liability, some states also require you to have uninsured motorist coverage.
Most companies will send you a free car insurance quote and have an agent contact you via email or phone to further discuss your needs. This is when you can talk about discounts, coverage, and deductibles. You may be able to save big by bundling with other policies such as home or life insurance.
Despite the uncertainty of these times, you can have peace of mind knowing that insurance companies are doing all they can to adjust to the circumstances and meet your needs. Throughout this pandemic, they’ve worked with drivers to extend grace periods, reduce premiums, process claims, and modify policies. While some things have changed, the one thing that certainly hasn’t changed is their dedication to keeping drivers protected.