If you aren't using your vehicle to commute for the time being, you can temporarily adjust your coverage to save money.
Most insurers will do the following:
Defer monthly payments for one month. The missed payment will be spread over the remaining payments on the term of the policy. Amend the use of the vehicle to pleasure only and reduce the annual mileage for a premium credit if the vehicle was originally covered for commuting or used for business. The media reported that this kind of change could result in savings of up to 15% off regular premiums. However, if the vehicle was already rated for pleasure driving only, no savings will result.
Ways to reduce your auto insurance bill during COVID-19
Changes in your driving profile and requests for payment relief must be communicated to your agent or broker for a calculation of the premium reduction, which will vary by company and insurance policy. Savings are less likely for retirees whose vehicle coverage is already rated for pleasure use, as most likely they are continuing to use their vehicles to shop for groceries and medications. They can’t “suspend” coverage, because their vehicle is still in use, so no reduction is forthcoming.
If you want to benefit from a premium reduction, the onus is on you, the insured, to figure out how it’s done. A few companies offer it automatically, sometimes by cheque mailed to policyholders, but most require you to contact your insurance broker or agent. Check our website first to determine if an online portal is available to simplify the process.
Should I cancel my car insurance if I’m not driving my car due to COVID-19?
This may seem like a tempting option to save money on your insurance. However, we do not recommend cancelling coverage. If your vehicle is not insured and is damaged by something such as fire, vandalism, or theft, you will be left to cover the costs on your own. Canceling your insurance will also create a “coverage gap,” which insurers see as a higher risk, resulting in higher rates in the future.
A safer option would be to take all coverage off the car except comprehensive coverage. This will protect the car if it is damaged while not being driven. This alone can result in significant savings. Just don’t forget to reactivate the coverage when you are ready to drive again.
Should I lower my auto coverage because I’m driving less due to COVID-19?
If your driving habits have changed because of COVID-19 different states require different levels of mandatory insurance coverage. If you need to cut expenses temporarily, you can switch to the lowest coverage required in your state. However, keep in mind, if you are in an accident you may be left paying more out of pocket if the damages exceed the amount of coverage you have.
You can save some extra money by waiving rental reimbursement and towing coverage. This could be a good idea if you are using public transportation and/or already have a new car roadside assistance plan. If you are not doing so already, you can save by insuring all your vehicles on the same policy and by bundling car and home insurance with the same carrier.
What should I do if I am not able to make my insurance payment?
If you find yourself in a temporary financial emergency and are unable to make your insurance payment, contact your agent about the possibility of changing your payment due date or your pay plan on a temporary basis. Many insurance providers are offering extended grace periods and other payment options during this time if you cannot currently afford your premium.