With the current COVID-19 pandemic, uncertainty is at an all-time high. Businesses are closing down, states are employing lockdowns, and unemployment is increasing in record numbers. People are fearing for the health and well-being of themselves and their loved ones.
With everything else on your plate, auto insurance might be the last thing on your mind. On the other hand, you may be wondering how your auto insurance will be impacted by this pandemic.
If you’re feeling a financial pinch, you might even be considering dropping portions of your coverage to save money. To learn how auto insurance companies are responding to this pandemic and how to save money on your premiums, keep reading.
How Will Coronavirus Impact My Car Insurance?
The coronavirus won’t directly impact your car insurance coverage unless you decide to make changes to it. Your premiums will remain the same, though many auto insurance companies are offering longer grace periods for payments.
The biggest difference you’ll notice is that you have to use digital communication to talk with your auto insurance representatives.
Like most businesses, auto insurance companies are trying to protect their employees and customers. They’re reducing work hours, letting employees work from home, and amping up digital communication to reduce in-person meetings as much as possible. Finally, because of this you may be asking “Why is car insurance so expensive?” Auto insurance companies are helping customers who are struggling to make their payments.
What Are Car Insurance Companies Doing For the Pandemic?
Some auto insurance companies are helping ease the burden on consumers who have been hit hard financially by COVID-19. They are doing so by:
- Allowing for updated signatures on policies.
- Providing payment extensions and increased billing support.
- Offering longer grace periods before terminating policies due to the inability to pay.
Of course, the specifics will depend on both the company and the policy. Ask your auto insurance company what kind of financial support is available to you.
How Can I Communicate with My Auto Insurance Agent?
While COVID-19 has caught everyone off guard, modern technology is allowing most communication to go on without a hitch.
Here are some ways to get in touch with your car insurance company:
- Give them a call.
- File a claim online or via text message.
- Schedule a meeting through a video call service.
- Ask questions on their website’s online chat service.
- Visit their mobile app.
- Check your email for their updates.
- See our guide to 9** **Methods on How to Lower Car Insurance Rates
These tools can help you reach your auto insurance agent if you want to make changes to your coverage or ask other questions. However, you may experience longer wait times over the phone, given the circumstances.
What Should You Ask Your Auto Insurance Representative?
If you’re concerned about what changes are taking place at your auto insurance company, call them and keep an eye out for emails containing updates.
Also, use this time to talk to your car insurance agent about non-coronavirus matters, such as:
- Adjusting your policy’s coverage
- Adding a new driver to your policy
- Inquiring about discounts
- Informing your agent on important personal updates that may impact your premiums
Also, in terms of auto insurance and working from home, you’re driving less and may be qualified for a less expensive auto insurance option.
Should You Cancel Your Auto Insurance During the Coronavirus Outbreak?
With quarantine measures in place, there are less people out and about driving. When money is especially tight, people have considered canceling their auto insurance altogether to save where possible.
Generally, this is not recommended. Most states legally require auto insurance if you plan to drive at all. Each day of this pandemic brings with it new guidelines, so while driving may not be an option today, this is subject to change in the near future.
Furthermore, you want to have your driving privileges intact in case you need to make an emergency drive to the hospital, the grocery store, or a family member’s home.
Should I Reduce My Car Insurance Coverage?
If you currently have a full auto insurance policy, you might want to cut it back to save some money. This is a viable option. However, you need to cut your coverage very carefully, or you’ll be underinsured if you get into an accident.
A full car insurance policy contains the following types of coverage:
- Bodily Injury Liability – This covers another person’s medical bills if they get injured in an accident that you caused.
- Property Damage Liability – This covers the cost to repair damaged property that results from an accident you caused.
- Personal Injury Protection – This covers the medical bills for you and your passengers if you get into an accident.
- Uninsured/Underinsured Motorist – This covers the costs related to getting in an accident with someone who lacks adequate insurance.
- Comprehensive – This covers the cost of repairing damage to your vehicle that occurred while it was parked.
- Collision – This covers the cost of your vehicle repairs if you get in an accident.
Some of these types of coverage are more critical than others during the coronavirus outbreak. Check your state’s legal requirements and then see where you can cut back from there. Oftentimes, comprehensive coverage and collision coverage are optional. However, if your car is sitting in your garage during a lockdown, comprehensive coverage may be more important than ever.
How to Decide If You Should Reduce Your Coverage?
When deciding whether to reduce your auto insurance coverage or not, you need to do a careful cost-benefit analysis. You don’t want to drop important coverage, get in an accident, and get stuck footing the entire bill. This will nullify, if not exceed, any monetary savings you get from lowering your insurance premium.
Also, don’t forget that there are many fearful people on the road, distracted by the pandemic. Adequate car insurance is more important than ever if you want to remain financially protected in the case of a collision.
Conduct a Cost-Benefit Analysis
If you want to find out the value of your car to choose a strategic amount of coverage for it, do some research about the average value for cars that fit your make, model, and year. This will provide the current value of your car, so that you can know exactly how much auto insurance coverage is financially beneficial.
Compare the value of your car to your auto insurance premium. If your premium exceeds your car’s value, it isn’t worth it.
Inquire About Comp-Only Insurance
On the other hand, if you have no plans to drive and your car is stored away indefinitely, you can decrease your coverage to just include comprehensive insurance. This is called “comp-only insurance.” This level of coverage will keep your car protected from physical harm while it’s parked in the garage, freeing you up financially from unnecessary driving-specific coverage.
Keep in mind that many car insurance companies will only offer comp-only insurance if your car has been out of use for a specific amount of time. You may need to wait a while until you meet their requirements or shop around for another company.
Talk to Your Car Insurance Agent
While you’re staying at home, it’s a perfect time to call your car insurance agent and run any of your plans by them. You certainly don’t want to be underinsured in such uncertain times, but you do want to streamline your expenses.
Your auto insurance agent can guide you in the right direction.
How to File a Claim During the COVID-19 Outbreak
If you need to file a claim during the pandemic, you will have to go about it a little differently. First, you’ll have to rely on digital communication, be it phone, email, or text. This may vary depending on who you need to contact.
Claims often involve several businesses, including:
- Your car insurance company
- The other party’s car insurance company
- The auto repair shop you choose
- The police officers who reported on the scene
Some of these key participants may be harder to reach, due to limited business hours and high demands on phone communication. Expect more delays. Like with any claim, you’ll need to provide thorough documentation and photo evidence of the accident, probably through text or email.
More Ways to Save Money On Car Insurance if You’re Unemployed
If you’re one of the 3.3 million Americans that have been laid off due to the COVID-19 pandemic, you may be feeling a lot of financial stress. You’re probably more motivated than ever to reduce your car insurance premiums.
Here are some tips to reduce your auto insurance costs and make your coverage more affordable:
- Shop around to find the best premium quotes.
- Pay your premium in full, rather than in monthly installments.
- Bundle your home/renters insurance and auto insurance to get a better deal.
- Bundle all your vehicles’ insurance policies under one company.
- Drive carefully to avoid increasing your premiums.
- Raise your credit score.
- Increase your deductible.
Online Auto Insurance: A Resource For Choosing Car Insurance During The Coronavirus
During these unprecedented times, you want to find an auto insurance company you can trust. To make that a little easier, Online Auto Insurance partners with auto insurance companies nationwide to find you the best auto insurance policy.
CDC. Coronavirus (COVID-19) https://www.cdc.gov/coronavirus/2019-ncov/index.html
The Guardian. Record 3.3m Americans file for unemployment as the US tries to contain Covid-19 https://www.theguardian.com/business/2020/mar/26/us-unemployment-rate-coronavirus-business
Find Law. Car Insurance Laws by State https://injury.findlaw.com/car-accidents/car-insurance-laws-by-state.html