Car Insurance and Covid—What It Means For You

Car Insurance and Covid—What It Means For You

So, you have been working at home for the better part of a full year with your car safely parked in the garage or driveway.  Instead of putting 10,000 or more miles on, you drove it a fraction of that and had zero claims.  You even paid your same premium rate all year—on time.  Depending on your agency, you might have received a small refund check acknowledging the changes in your driving habits this year.  But if you are expecting a refund check or a decrease for next year, don’t hold your breath.  At least not without some effort on your part.

You can potentially save a bit of money because you are no longer commuting as much as pre-Covid days.  It’s up to you to call your insurer and request an adjustment to the mileage you drive.  Again, depending on the company, some might readily offer you a discount but others might tell you this is a temporary situation and be unwilling to reduce your rates.  If you have one of the latter, it’s a good time to talk to other insurers.

You aren’t alone in this effort.  The Consumer Federation of America and the Center for Economic Justice has communicated with each state’s insurance commissioners.  Because the number of accidents has clearly gone done as did claims, insurers should return the overly expensive premiums back to its policyholders.  It is just common sense—why pay for something you are not using.

Early on, many agencies sent a small percentage refund check to their customers.  For most, this was less than 5% of your yearly rate.  This wasn’t an altruistic effort.  They knew the government would be reviewing that common sense thought and tried to get in front of it.  But, by now, all of those programs have expired and we are still at home, not driving.

Clearly auto insurers have made windfall profits this year from those excessive premium payments.  This really shouldn’t be another thing which consumers have to worry about during Covid-19.  But how to get that much deserved break?

First and foremost, call your agent.  Having a conversation about your overage or even your inability to pay is key.  Remember, until you make a connection, you are just a number and they don’t know or care about you. 

In addition to asking for an outright price break, have a conversation about the newer technology they can add to your vehicle which will track the number of miles you are actually driving.  With solid proof that you are under the estimated yearly amount, there should be reason to adjust the premium amount.  However, be careful, because they might also be tracking your speed and hard stops which could negatively affect your premium as well!

If you don’t seem to be making the headway you want, you can always shop around for a new agency.  Armed with this new scenario and a better set of standards for the upcoming months, you might be able to get the same or better benefits as a cheaper rate.  Just keep in mind that if your driving habits do start to change, you need to make sure the agency is updated accordingly.

It certainly isn’t anything any of us want to do, but as with most things, you have to put some effort in to get the benefit out.  Don’t expect these larger corporations to come to you with discounts or refunds unless their feet are held to the fire by the government or a class action.  You are your own best advocate in these situations.