How Covid-19 Might Affect Your Auto Insurance Image

How Covid-19 Might Affect Your Auto Insurance

May 7, 2020


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As with some other types of insurance, Covid-19 won’t necessarily have an impact upon your auto policy, but you might find yourself struggling to keep up with the payments. If this is the case for you, there are a couple of things you can do to ease the financial burden, and one thing you mustn’t do: 

Do NOT cancel your auto coverage:

Unless you plan on giving up your car, you should hold on to your insurance coverage, as simply cancelling it can have several implications:

Increasing your deductible might be an option:

By increasing your deductible – the amount of money you agree to pay out before coverage kicks in – you may be able to reduce your premium. However, you’ll need to assess the risk associated with doing so, by balancing out your need to reduce costs now, with the potential cost should you have an incident involving your car.

Lowering your liability:

While this will make a smaller difference to your monthly premium than increasing your deductible, it could be an option if you really need to be mindful of costs currently.  

Changing to a usage-based plan:

Many of us are driving a lot less under the current circumstances, making switching to a usage-based policy, a potentially smart move. This type of coverage depends upon driving data usually gathered from apps on smartphones, to assess how much you’ll need to pay for your coverage. 

If you’re considering making any changes to your auto insurance, it’s strongly recommended that you speak to your provider before taking any action. 

How will Covid-19 affect insurance claims?

A lot will depend upon each individual insurance provider and how they’re currently managing their claims. Since offices have been forced to close, all claims are being processed digitally, and if your chosen provider doesn’t have the latest tech to cope with this change to proceedings, then claims could take considerably longer than usual. 

What if you can’t afford to pay your auto insurance?

This may well be a common problem, at least until the current situation changes and more of us can get back to work, and while it of course isn’t good news for auto insurance companies, it might be an unavoidable reality for their customers. As is the advice for anyone experiencing issues with their insurance - and for any reason - call up your insurer and talk to them directly to see if a solution is available.  

Since this situation is out of all our hands, it’s important that customers continue to communicate with their insurers and that both parties work together to find solutions wherever possible. And no matter how tempting it may be, do NOT simply cancel your auto insurance policy, as this could leave you dangerously unprotected.