Coronavirus Auto Insurance Questions

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With the current Coronavirus crisis, drivers worldwide 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. If you’d like a free quote, start by entering your zip code.


TABLE OF CONTENTS

What You Can Do With Your Car Insurance During the Pandemic

What Auto Insurers Are Doing

 


What Can You Expect From Your Auto Insurance Company During the Coronavirus Pandemic?

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 make your payments on time. You will be covered up and to your policy’s limits and the type of coverage you choose.  

Many cities and states have required a mandatory quarantine due to the global COVID-19 pandemic that has altered billions’ daily lives. 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. Many small businesses were forced to shut down and might never reopen. 

Others have to stay home to care for elderly loved ones or children out of school. It all means 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? It is a prudent question that has no easy answer.

Just about every street or freeway in the United States has seen a significant reduction in traffic flow. Californians who were out during the pandemic have long been used to heavy stop-and-go traffic on the freeway system. Nowadays, these drivers find almost no traffic, even during rush hours. This includes taxis, ridesharing vehicles, school buses, and other routine drivers. This reduction in the number of cars on the road also means fewer accidents. The decrease in accidents should mean an auto insurance rate cut, but for many, rates haven’t budged at all. 

Is an Auto Insurance Policy Binding?

So, given what we know about the new Covid 19 reality, what is insurers’ responsibility? 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 if there’s a 100-year virus causing massive unemployment and businesses to close. To put it simply, you signed a policy and agreed to pay the premium amount.   

However, it does raise many 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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Coronavirus Auto Insurance Questions


Should car insurance rates be lowered since many people stopped driving due to the Coronavirus?

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
  • Additional specifics of the ZIP code

Traffic accidents have decreased as a result of orders to stay home during the coronavirus pandemic.

If you don’t drive or drive very little, it would be fair for your rates to drop quite a bit. Suppose there are no differences in the price of premiums for the millions of Americans sheltering in their homes or driving far fewer miles today. In that case, 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? Since the number of cars being driven has declined sharply, the likelihood of getting into a vehicular accident has decreased dramatically. If people are likely to have fewer accidents, they could pay too much for their monthly premiums in addition to not needed added coverage like uninsured motorist protection. Of course, this premise is true for drivers who are entirely sheltered at home and have not driven in weeks.

The situation is even more unfair if most states encourage motorists to buy Coronavirus detectors onto their policy. While states make these requests, they also demand that people don’t leave their homes at all. All of this has led to a lot of frustration among consumers.  

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Can't Afford My Auto Insurance Payments During The Coronavirus Outbreak


What If I Can’t Afford My Auto Insurance Payments During The Coronavirus Outbreak?

On a scale not witnessed since the great depression and a sharp decline for many services, business closings have hit the U.S. economy hard. This sad reality is one of the worst effects of the coronavirus pandemic in the country. That is why many car owners are expected to have a difficult time making payments going forward. So, what are your options if you are in a financial bind due to the Coronavirus? 

Don’t Ignore Your Auto Insurance Payments

If your budget is tight, perhaps you might think of not paying your premiums or canceling your coverage altogether. After all, many people have stopped driving during the pandemic. 

However, this is not advised for several reasons. While you might not be driving now, you will probably need to soon. Therefore, you should keep some level of coverage. If you drive without any coverage, you can face financial liability if you get into an at-fault accident. Moreover, keep in mind that driving an uninsured car is illegal in most states in the U.S.

Your insurer will most likely cancel your policy after you miss a payment. Later on, you will surely pay much higher auto insurance rates when trying and getting a new policy. In the long run, you will end up not saving any money. Stay insured and contact your insurer about any possibility of rate reductions.

Your insurer will most likely cancel your policy after you miss a payment. Later on, you will surely pay much higher auto insurance rates when trying and getting a new policy. In the long run, you will end up not saving any money. Stay insured and contact your insurer about any possibility of rate reductions.

Contact Your Auto Insurance Agent

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 insurance agency. Check with them to see what your options are and tell the agent you need assistance. 

You might qualify for a discount going forward. Some insurers might offer rebates. Your best bet is to talk to your insurance company directly and look at all your options. 

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Should I Reduce My Auto Insurance Coverage During the Coronavirus Pandemic?

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. You might be tempted to cancel part of your coverage, such as comprehensive and collision coverage, to save some money. First, consider whether you can pay for damages to your vehicle if, in an unfortunate event, your car is damaged or totaled. Keep in mind that your vehicle could be damaged, stolen, or vandalized even during a pandemic. The last thing you need is a massive bill when you are already struggling due to a job loss or a business closure.  Without maintaining proper coverage, your vehicle would not be covered if you get into an accident you were held liable for.  

On the other hand, 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 you should keep your policy in force if you plan to use your car. However, you might want to cancel some optional coverage to save as much as you can. You can always add it on later when your financial situation improves. 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 your coverage to avoid driving unprotected. If you still want to reduce part of your coverage temporarily, contact your provider or agent.

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What are Insurers Proposing Regarding Price Adjustment due to COVID-19?

Some insurers have noted that many consumers already have low mileage discounts even before the current pandemic outbreak. 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. 

Insurers are Working With Their Customers to Find Solutions 

Many companies have implemented programs that help consumers affected by the new coronavirus pandemic. Some programs allow 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. If you want to get a new car insurance quote, enter your zip code and fill out a quick application.  

Keep in mind that grace periods and special payment programs help delay payment times 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.

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How To Get Your Car Insurance Refunds?

The orders for social isolation and staying home due to the COVID-19 pandemic have resulted in far 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. Companies with instituted discounts include State Farm, Geico, Good To Go Insurance, Liberty Mutual, and other providers.

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.

Each provider differs in the way they apply their refunds. 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 credits 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 agency or broker that sold you a car insurance policy has not yet offered a refund plan, there is an easy way you can do it. All you need to do is 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. Next, emphasize that you drive much less these days, so you are at a much lower risk for them.

Can I request a refund if I prepaid my premiums in advance?

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.

Are refunds the only way you can make your auto insurance cheaper right now?

Fortunately, refund programs are not the only way to reduce auto insurance costs during these times of pandemic and social isolation. There are other ways to save that you can look into and take advantage of:  

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. Good To Go Auto Insurance is a popular site that allows consumers to compare up to 10 side-by-side rates quotes in about five minutes.  

Check Eligible Discounts: It is essential to make sure you know what discounts offer auto insurers you evaluate. You can also take advantage of bundling your home and car insurance with the same company. In most cases, you can get considerable savings on your insurance rates. 

Change Your Driving Status: You can now change your driving status 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. As you’ve stopped driving long distances to work, you can also let your insurer know that your monthly mileage is much lower. This information should lower your rates by 10% or even more.

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Which Insurers Offer Special Payment Programs?

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:

  • Customers will not pay late fees if they request to skip two consecutive payments.
  • Extended expiration dates and penalties waived
  • No cancellation of your coverage for one month after your policy expires.

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.

Some Insurers May Not Offer any Financial Help During the Coronavirus Outbreak 

It’s an excellent time to contact your insurance company and learn about their financial assistance options now that you have 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.

Compare Auto Insurance Rates and Lower Your Premium 

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 current paying rates 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 shopping for lower car insurance rates. Just enter your zip code and get a free quote in minutes. You can use any device connected to the web to get a quote. 

Now you have the answers to these coronavirus auto insurance questions, 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 and lower your premiums.

 

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