By Contributing Author
With many states in complete lockdown and the overall population avoiding travel, most car-owners are driving much less. As of March 26, 3.3 million Americans have filed for unemployment, and others are scared about their financial future.
If you’ve stopped driving and you’re looking for ways to cut costs, you may be wondering if you should make changes to your auto insurance policy. In this article, we’ll go over a few ways that COVID-19 could affect your auto coverage.
Will There Be Lower Premiums?
Recently, there has been a call for insurance companies to lower or refund premiums due to the coronavirus lockdowns. The Consumer Federation of America and the Center for Economic Justice have asked the insurance industry to offer premium relief for policyholders.
The argument is that because there are fewer drivers on the road, there will also be fewer accidents. This means bigger profits for insurers.
Should You Cancel Your Car Insurance?
If you plan on driving to the grocery store or pharmacy for the essentials, you’ll need car insurance. Getting caught driving without car insurance can result in fines, license suspension, and even jail time.
Even if you’re not driving, it’s still essential to have insurance. Many accidents could happen to your car while it’s sitting in your driveway or parking lot. Comprehensive auto insurance covers theft, vandalism, and problems such as fire, floods, or hail.
Should You Switch to Pay-per-mile Coverage?
If you’re one of the many people who are working from home due to COVID-19, you could be wondering if you should switch to pay-per-mile insurance. Keep in mind that when your commute does resume, you could end up having to pay much more than if you had a traditional policy.
That said, pay-per-mile is a good option for anyone who won’t be driving much in the long term. You’ll pay a base-rate plus a rate per mile that you drive, which will be tracked through an in-vehicle device.
What to Do If You Can’t Afford the Premium
If your income has stalled because of COVID-19 and you can’t afford the premium for your car insurance, call your agent. At the moment, many companies are offering grace periods and flexible payment options.
‘Student Away at School’ Discounts
Universities around the country are sending students home. Now that they’re no longer away at school, are you still able to save on your premium?
“Student away at school” discounts typically apply to families with a young person away at college. The discount is on the car that students will only use when they’re home on breaks. Depending on the insurance company, the discount should remain valid until the end of the school year.
If you’re looking to save on your premiums, contact your insurance agent to see what options are available to you. State governments across the country are pressuring insurers to offer extended grace periods and flexible payment options. Don’t panic and cancel your car insurance policy right away, which could cost you more time and energy in the long run.