COVID-19 has been a huge hit to so many industries, even impacting insurance. We have fewer visitors to our homes, fewer (if any) travel plans, and many of us are working from home. This has become a huge shift for some and a struggle to fall into our new patterns.
But what about insurance? How has it been affected?
In this blog, we break down how your auto insurance rates may be impacted by the onset of the global COVID-19 pandemic.
What we know…
One of factors that impacts your rates is how often you use your vehicle. Longer commutes during higher traffic time may equate to an increase in premiums, whereas infrequent usage may mean you will pay less. As of the beginning of 2021, during the thick of the COVID-19 pandemic, up to 32% of workers between the ages of 15 to 69 were doing most or all of their work from home. This has translated to less drivers on the road and more infrequent usage of our automobiles, with most of our trips being solely for essential purposes.
Theoretically, we may be able to reduce our auto insurance coverage as we are not using our vehicles as frequently as before. You can discuss with your broker what your options may be.
Social distancing may have resulted in a reduction of claims
One of the external variables impacting the cost of your auto insurance is the rising cost of insurance claims. Essentially, newer cars being made as of late are costing more to repair/replace due to the materials being used and expensive technology, making claims more and more pricey. The onset of COVID-19 has resulted in a reduction of total claims, with people needing to drive less. As public health measures further encourage social distancing and working from home, the reduction of vehicle usage may increase and eventually cause insurance providers to look again at their rates. Some insurance providers have even stalled rate increases for current times.
Some insurance companies are offering reductions
This may not be the same case with your insurance company, but it doesn’t hurt to check. Due to the circumstances, many insurance companies (especially those aligned with the Insurance Bureau of Canada) are offering discounts as a means to provide some relief to those impacted by COVID-19 and for consumers whose commutes have been shorted or altered substantially. In current times, this may not still apply but it is worth checking in with your insurance broker or auto insurance provider to see if you are eligible for any reductions.
What your insurer may be able to do
If your circumstances have been impacted by COVID-19, your insurer may be able to do a number of things to help you cut down on your overall costs. These include deferring your monthly payments and spreading the missed payment over your remaining ones, removing coverage on a vehicle that is no longer being used due to the pandemic situation (although it will be highly recommended that the policyholder active their coverage again when they can return to normal habits.)
Your insurer may even be able to switch your vehicle’s usage over to “pleasure only” and offer a reduction on your premiums if your annual mileage has been severely reduced and the vehicle was previously used for commuting and/or business purposes. Unfortunately, if your vehicle was already deemed for “pleasure use” only, this will not apply to you.
It may be up to you
In the end, if you are looking for a premium reduction as a person who has had their daily commute impacted by the COVID-19 pandemic, it may be on you to contact your insurance broker or provider. Panda7 is friendly, approachable, and willing to answer any of your questions about COVID-19 and your insurance. This is a great way to open the door when it comes to discussing a potential reduction. Ensure that you have all your auto insurance policy information on-hand.
The bottom line
This global pandemic has had so much impact on not just Canada, but the world. Due to closing borders, travel restrictions, lockdowns, and working from home, our lives have changed in a number of different ways. It poses challenges to those of us who are struggling to adapt to our suddenly restrictive environments, forcing us to go digital where possible and move around less.
While many other aspects of insurance have been impacted differently, we know that due to workplace measures requesting we shift to working from home we are using our vehicles less. Thanks to this, we may be eligible for reductions or we can switch our coverage over to something less expensive.
A Panda7 broker can help you navigate these difficult times when it comes to auto insurance. Let us do the worrying so that you can focus on adapting to your new working from home environment.