Coronavirus Auto Insurance Questions
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With the current Coronavirus crisis, drivers all over the country have numerous questions surrounding their auto insurance payments and coverage. Read below to get the answers you need regarding your policy and find out about your payment options.
What You Can Do With Your Car Insurance During the Pandemic
What Auto Insurers Are Doing
Your car insurance provides the financial protection you need in the event of a car accident. If the mishap makes you liable for damages to third parties, or if your car is stolen or damaged, your insurance may cover the costs. However, you will be protected only as long as your policy is active, and payments are made on time.
However, many cities and states have required a mandatory quarantine due to the global COVID-19 pandemic. Given the reality that many businesses have shuttered, you may be one of those asking how your insurance will be affected during this stage.
Due to the Coronavirus in the U.S., millions of people are stuck at home. Some are fortunate to work remotely from home; others not so lucky, have lost their jobs. Others have to stay home to care for elderly loved ones or children out of school. This means that fewer people are on the roads driving their vehicles to work or college. Some people have stopped driving altogether. So why are insurers still charging the same premiums if many people aren’t driving at all? This is a tough question that has no easy answer.
Just about every street or freeway in the United States is empty. Californians that are out and about, long used to heavy stop and go traffic on the freeway system, are finding almost no traffic, even during rush hours. This includes school buses and other routine drivers. This reduction in vehicles on the road also means fewer accidents.
So, what is the responsibility for insurers? Should they also suffer and reduce rates while millions of their customers have lost their jobs and can’t afford it? For the moment, it seems many carriers are holding their rates steady. Why is this?
Simply put, it’s a binding contract until the policy expired. By signing the policy, the premiums were set. The companies have no legal obligation to reduce rates, even in the event, there’s a 100-year virus that is causing massive unemployment.
However, it does raise a lot of moral, financial questions in a time of crisis and hardship. Many people ask if my car is parked all the time, should companies continue to charge the same premiums? Is it possible to obtain any financial relief according to the effects of the coronavirus pandemic?
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Companies set premiums considering many factors. The number of miles traveled by drivers is one of the most weighed factors when determining total premiums. Other factors may include driver behavior, vehicle safety characteristics, traffic density in the area, and other specifics of the ZIP code. Traffic accidents have decreased as a result of orders to stay home during the coronavirus pandemic.
So, if you don’t drive, it would be fair for your rates to drop. If there are no differences in the price of premiums for the millions of Americans sheltering in their homes or driving far fewer miles today, then the premium price estimate is based on erroneous data. That implies that consumers will pay overpriced premiums.
It is also fair to ask: Are companies making unfair income from this pandemic? As the number of cars being driven has declined sharply, then the probability of car accidents occurring decreases dramatically. So if people are likely to have fewer accidents, they could be paying too much for their monthly premiums. This is, of course, true for drivers who are completely sheltered at home and have not driven in weeks.
The situation is even more unfair if we think that motorists are forced by most states to buy Coronavirus detector onto their policy, and then the state demands they don’t leave their homes at all.
Business closings and declining demands for many services hit the U.S. economy hard. This is one of the worst effects of the coronavirus pandemic in the country. That is why many car owners are expected to have difficulty making payments. So, what can you do?
If your budget is tight, perhaps you might think of not paying your premiums while you are not driving during the pandemic. However, this is not advised for several reasons. For starters, this can make you face financial liability. Moreover, keep in mind that driving an uninsured car is illegal in most states of the United States. Also, your insurer will most likely cancel your policy after you miss a payment. Later on, when you try and get a new policy, you will surely pay much higher rates. In the long run, you will end up not saving any money. Stay insured and contact your insurer about any possibility of rate reductions.
Since you legally are required to insure your vehicle but are not driving it due to the coronavirus pandemic, what do you do? First off, you can contact your agency. Check with them to see what your options are. You might qualify for a discount going forward. Some insurers might offer rebates. Your best bet is to talk to your company directly and look at all your options.
You may be wondering if you should cancel some of your coverage to save on your premiums during the SARS-CoV-2 pandemic.
You can leave your car in the garage for a more extended period than usual because you must stay home during the coronavirus pandemic. However, if you are tempted to cancel part of your coverage, such as comprehensive and collision coverage, consider whether you can pay for damage to your car if, in an unfortunate event, your vehicle is damaged or totaled. Keep in mind that even during a pandemic, your vehicle could be damaged, stolen, or vandalized. Without this optional part of your coverage, your car would not be covered.
Now, if your vehicle is in a long-term storage location, and you don’t plan on driving it at all, you might consider reducing your coverage, while still keeping comprehensive insurance.
But, keep in mind that if you plan to use your car, even just a little, you should keep your policy in force. Remember that while you are likely to travel less during this pandemic period, you should be prepared to drive in the event of an emergency. Therefore, it is advisable not to drop any of your coverage to avoid driving unprotected.
If you still want to reduce part of your coverage temporarily, contact your provider.
Some insurers have noted that many consumers already have discounts for low mileage even before the current pandemic. Also, motorists that are considered safe drivers are eligible for discounts.
Some people still are not happy with being charged, even though they might be on a low mileage policy. They want a total rate reduction, while their vehicles are parked and idle. This is wishful thinking, though. No one knows when the Coronavirus pandemic will end, and many people who are supposed to be in lockdown are driving their vehicles more than ever.
Many companies have implemented programs that help consumers affected by the new coronavirus pandemic. Some programs allow for deferred payments, the removal of late payment charges, and the suspension of policy cancellations.
In regular times, the grace periods are seven days, although they differ between companies and states. However, in times of crisis, it is normal for companies to offer more extended grace periods. Contact your insurer to see exactly what they are offering.
Keep in mind that grace periods and special payment programs help delay payment time, but do not reduce the amount you owe. Your total bill will continue to accumulate if you use an extended grace period or a unique payment program.
The orders for social isolation and staying home due to the COVID-19 pandemic have conditioned fewer people on the road (along with many parked cars). As dozens of companies have promoted remote work and personal travel has decreased significantly, that is why a staggering number of auto insurance companies have offered rebates and credits to their clients to save money in this critical financial time. These insurers include State Farm, Geico and Liberty Mutual, among others.
Just to look at an example, State Farm, the nation’s largest auto insurer, has awarded policyholders approximately 25% credit on premiums paid. This credit is equivalent to 2 billion dollars for a total of 40 million vehicles.
The way refunds are applied differs between different companies. These companies and others have offered one-time refunds, credits, or payments. Premium rebates can be anywhere from 10% to 35%, or fixed discounts per vehicle from $ 20 up to more than $ 50 per car. As the credit offered by Geico (15%), some of these refunds will be applied in terms of 6 and 12-month policies. Fortunately, most of these variants do not even require any consumer action. These will be applied automatically to alleviate stressful processes for clients.
If the company that sold you a car insurance policy has not yet offered a refund plan, there is an easy way you can do it: just pick up the phone and ask them directly. This is the perfect moment for this. Just let them see the sheer number of discounts and rebates the competition is offering, further emphasizing the fact that you drive much less these days, so you are a much lower risk for them.
Generally, insured drivers who paid their premiums months in advance will have the same benefits as insured drivers with monthly premiums. They will probably receive similar refunds for the same months in both cases.
Fortunately, refunds programs are not the only way to reduce auto insurance costs during these times of pandemic and social isolation. You have other ways to save:
Shop around: Different companies offer better rates depending on certain factors. That is why insured drivers who are up to date with their premium payments can save a lot of money by comparing offers from several auto insurance companies.
Check Eligible Discounts: It is essential to make sure you know what discounts are offered by the auto insurers you are evaluating. You can also take advantage of bundling your home and car insurance with the same company. Usually, only with this, you can get considerable savings on your insurance rates.
Change Your Driving Status: Your driving status can now be changed as you have become a non-commuter driver during the coronavirus pandemic. In general, the fewer miles you drive annually, the lower your rate will be. So, as you’ve stopped driving long distances to work, you can also let your insurer know that your monthly mileage is much lower.
Several reputable auto insurance agencies are making exceptions for consumers, mainly affected by the Coronavirus. Among the companies that offer special payment plans are:
Among the payment options that these companies have promoted in this period of crisis are:
You can call your agent and ask if you are willing to adapt and work out a payment plan that fits your specific needs if given your temporary situation. You could ask for a one month delay in your premium payment.
It’s an excellent time to contact your insurance company and learn about their financial assistance options now that you are having a hard time. Consider the coverage they provide, the cost of this coverage, as well as your company’s reputation and fringe benefits you can get. If it doesn’t seem fair, it’s time to switch providers.
Have you long wanted to reevaluate whether your current provider is the best option you have? There’s nothing better than investing a few minutes of your time in this downtime and comparing rates. You could end up saving a lot of money.
Think of it this way. When the coronavirus crisis is over, you will return to the rush of everyday life and will not have time to shop around for car insurance. Find the coverage you need online and any discounts you may qualify for.
Shopping around for a new auto insurance provider can be tedious, but it’s worth it. It is an excellent way to check if the rates you are currently paying correspond to those offered by other providers. Some insurers have already lowered their rates for new customers due to the Coronavirus. If you can find even a small adjustment in your rates or a better price, it will be worth it to change your company.
This is an excellent place to start to shop around. Just enter your zip code and get a free quote in minutes. Compare prices from any device connected to the web. Get the great rates you need during the coronavirus pandemic today. You really can get cheaper car insurance coverage. All you need to do is compare rates online. Get started now.