How to lower your auto insurance because of COVID-19?

Auto insurance – you pay for auto insurance as the insurance is meant to protect you and incur and cover the damages caused to you and your vehicle in an event of a mishap on the road. However, with lockdowns and restrictions on the movement being set in due to the COVID-19, there has been a significant drop in the number of cars on the roads and the number of miles Americans have driven.

For instance, let’s say that you bought a brand new Genesis GV80 in March 2020, and then restrictions were laid down due to the pandemic in the very next week for the next couple of months. And obviously, you did purchase insurance while you bought the vehicle, however, when your car was lying idle in the garage due to the lockdown, it’s almost like you paid for your insurance for nothing during that period. And this straightaway entitles you to a lesser premium.

According to statistics by the NHTSA, the number of miles driven by Americans in the second week of April went down sharply by 68% after shelter-in-place orders were imposed in most states due to the resurgence in the number of COVID-19 cases. Now, fewer cars on roads mean that there are lower chances of mishaps and accidents and that directly means that insurance companies did not pay out as much money in claims as they would under normal circumstances.

In such a scenario, you have all the right to save on your insurance premium. The simplest way to do that though is by suspending the insurance cover for this period. If you are down with and recovering from COVID-19 and if you know, for sure, that you won’t be driving the car for a certain time, you can ask your insurer to temporarily suspend the cover and the insurer won’t charge you for that timeline. However, for suspending the insurance completely, you need to fully own the car with no pending loans on it and you need to have a private, closed garage to keep your car totally safe during the period when the insurance is suspended.

On the other hand, if your driving has dropped by a significant percentage, even in that case, the insurance company will offer you some discounts. You only need to prove to the insurer that the driving times and miles have dropped significantly than usual and that way the insurer shall deduct a good percentage of your monthly premium. Moreover, if you can show the insurer that you’re in financial turmoil, even then the insurer can waive some amount off your premium.

You can further lower your premium by asking your agent to drop the optional coverage. Most insurance packages come with multiple optional items like the facility to cover the cost of a rental car when your car is undergoing service and repair. However, with reduced driving times, lower are the chances of a breakdown and lower are the chances of your going to a repair shop. You can simply ask the agent to drop redundant extras like this one and save a good sum on the premium.

However, always ensure that you have the essentials covered. Make sure that your modified insurance plan covers your state’s minimum liability coverage rules at least. Moreover, ask your insurer about Coronavirus-specific discounts. Many state governments have instructed insurance companies to deduct premiums, offer discounts and waive off late payment fines and further extend grace periods. Of course, these rules differ from state to state and insurer to insurer and you should check for such discounts applicable on your insurer’s website.

However, many insurance companies have themselves offered COVID-19 reliefs and benefits to their customers. Many companies have offered insurance rebates and refunds to their customers of over 15% for March 2020. You may need to check with your insurance company if you haven’t received your rebate. To continue receiving further such applicable benefits and rebates, update your direct deposit information with the insurer.

Further, look for extended grace periods. Generally, the grace period for paying the insurance premium is 7 days, however, during pandemic times many companies have extended the grace period for nearly 60 days. Again, this differs from insurer to insurer but the extended grace period could just take the burden of your monthly expenses down.

So, these are a few things that you can follow to get your insurance premium down during these trying and testing times. As mentioned, with reduced usage, insurance companies have already started offering benefits and discounts to their customers but there still are ways that could help you to get the premium down. We would highly recommend you thoroughly go through the revised policies and terms of your insurer.

Check for the schemes and waivers you’re eligible for, check whether there’s any redundant option in your plan and if there’s any scope for tweaking the plan, and then consult your agent or directly connect with the company. However, also bear in mind that the tweaks you make to the plan totally comply with the state’s norms and so also thoroughly read the state’s auto insurance norms. That way, you can end up saving a good sum on your insurance.

Magdalena Zlatica

“Lifelong entrepreneur. Total writer. Internet ninja. Analyst. Friendly music enthusiast.”