How to save on car insurance during the coronavirus pandemic


COVID-19 has changed the way Americans drive. That leads to savings opportunities on auto insurance. (iStock)

Safety experts made an interesting observation about auto vehicle accidents – they declined in the early stage of the coronavirus pandemic, as government lockdowns were more restrictive and fewer cars were on the road. This helped many drivers save on car insurance.

Consider the state of Ohio, where traffic accidents slid by 55% from a two-week period between March 9th and March 22nd, 2020, compared to the same period in 2019.

Unfortunately, roadways that were more wide open led to an increase in auto accident deaths, according to the National Safety Council. Traffic deaths rose 8% from 2019 to 2020, as more reckless driving occurred on wide-open roads and highways.

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Tips for auto insurance savings tips

There are multiple ways to save money on car insurance, even as the pandemic seems to be winding down. These tips should be front and center for savings-minded auto insurance consumers. When you’re ready to shop around, visit Credible to compare car insurance quotes and find the right auto insurance company for you.

1. Bundle your insurance. A great way to save on auto insurance at any time is to bundle auto insurance into other household insurance policies.

“Progressive, Geico, and State Farm are some of the most widely-used insurance companies,” said Jim Pendergast, senior vice president at altLINE, a division of Southern Bank, in Birmingham, Al. “These companies all offer insurance outside auto insurance, which makes it easier to bundle your insurance and save in the long run.”

Pendergast cites Progressive as one of the highest customer satisfaction ratings in the auto insurance agency because it’s highly customizable. “But to get the discounts, you have to install a device that sends data to Progressive, and consumers should know that,” he said. “Geico has consistently low prices for their clients, but they receive many complaints about their lack of payouts. Additionally, State Farm is known for giving significant payouts to customers, but they don’t commonly give discounts.” 

To get the best deal, drivers should visit Credible to compare insurance rates from multiple auto insurance companies within minutes.

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2. Ask for a premium reduction (and a refund) for decreased driving. The cost of auto insurance is based on the likelihood of being involved in an accident. Many Americans have transitioned to working from home, and these drivers may be able eligible for lower car insurance rates thanks to low mileage discounts. 

“If you’re barely driving or not at all, the risk drops dramatically – and so should your premium,” said Andrew Latham, a certified personal finance counselor and the managing editor of SuperMoney.com. 

Latham advises calling your insurance carrier and ask for a refund. “Let them know how many miles you drive on average now and request lower premium rates,” he said. “If you used to drive 20,000 miles or more a year and you now drive 12,000 or less, ask for a 25% discount (or refund). If it dropped to 5,000 miles or less, ask for a discount of up 45% to 50%.”

3. Suspend your coverage. If you’re no longer driving, consider pausing your motorist coverage altogether. 

“It’s as easy as calling your auto insurance carrier and requesting a six-month or 12-month pause,” Latham said. “However, think twice before pausing or canceling your coverage unless you have no intention of driving and the vehicle is safely stored (and off the street).”

Latham recommends that drivers switch to an auto insurance policy that tracks your driving and charges by the mile if there’s a chance you’ll need to drive your vehicle. “Metromile, for example, is an insurance provider that charges you a $29 base rate and then charges you six cents a mile,” he said. “The average driver saves around $740 a year by switching to a pay-per-mile policy.”

HOW TO CHANGE YOUR CAR INSURANCE POLICY

4. Change your policy based on how you drive. Auto insurance consumers can change their policies based on good driving habits and save money in the process.

“There are three main policy options that exist for drivers,” said Tomer Kashi, CEO and co-founder of VOOM, an insurance technology company based in San Francisco, Cal.

  1. Traditional yearly premium. “Auto insurance consumers can request a lay-up, which maintains coverage at a reduced rate for a defined period of time during which a vehicle isn’t used,” Kashi said. “For most drivers, this isn’t incredibly helpful as driving is a pretty regular activity.”
  2. Pay how you drive. This insurance model requires a way to track one’s driving behavior, gather data and quote accordingly.
  3. Pay as you drive. “The pay as you drive model enables more irregular drivers to avoid paying when their vehicles sit idle in the garage,” Kashi said. “Because there’s no lay-up needed for idle periods, drivers experience the most flexibility and can match their insurance costs to actual vehicle use.”

To cover as much auto insurance turf as possible, use Credible to view multiple policy benefits and features, all in a matter of minutes. You can compare car insurance rates and see if you qualify for a lower premium.

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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.



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