- During the COVID-19 pandemic, 57% of the car insurance industry offered some form of payment relief, Insurify found.
- But only 10% of those relief measures surpassed May.
- Despite the rate of driving and claims dropping during the pandemic, insurance companies have not lowered premiums accordingly, which could lead to a 6% increase in monthly rates in 2021.
- But if you’re trying to save money, you shouldn’t cancel your car insurance outright because it can lead to DMV reinstatement fees and lost discounts.
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The current COVID-19 pandemic has resulted in some millions of US jobs lost, sending shockwaves through the economy. It’s touched all aspects of life, including how frequently people drive and how insurance companies have responded.
Kacie Saxer-Taulbee, a data scientist at insurance comparison shopping website Insurify, told Business Insider that the company’s analysis of the car insurance industry’s response to the pandemic discovered that 57% of insurers offered some kind of payment relief this past spring. Usually, that took the form of a credit, refund, or a 10% to 30% discount of a policyholder’s monthly payment.
“However, only 10% of these relief measures continued past May,” Saxer-Taulbee said.
Business Insider reported last month that despite car-insurance companies offering $10 billion in discounts and rebates during the pandemic, customer satisfaction is still low. Many indicated a desire to change carriers because they weren’t aware of the discounts.
But don’t be so quick to cancel your car insurance altogether just because you’re driving less. Saxer-Taulbee said Insurify found that a mere two-month lapse in coverage can cost the average US driver close to $200.
“This figure is the combination of DMV reinstatement fees and lost insurance discounts,” she said.
When an insurance company sees that your history has a blip in coverage, they will view you as higher risk for cancelling in the future. So they’ll charge you more upfront in order to recuperate some of those costs proactively.
If you’re looking to save money, there are smarter ways to do it instead of cancelling your car insurance outright. Saxer-Taulbee suggested storing your car, reducing your coverage, and comparing rates from different insurance companies.
But she left off with a warning: “Even though driving and claim rates have dropped in 2020, most insurers have not lowered car-insurance prices in response. Unless providers decide to lower premiums, monthly payments are projected to rise by 6% in 2021.”