The fact that the current coronavirus outbreak is among the worst in recent times is beyond debate.
Social distancing measures, while critical in flattening the curve of the spread, have also put families under a financial strain, especially in the US. Many households are surviving on a single income and while people have curbed their expenses, some are necessary. Groceries are one of the necessary expenses and coincidentally, so is car insurance. Fortunately though, a lot of insurance companies have come forward to help in these tough times. Here is how you can save on car insurance premium until life resumes its normal flow.
First and foremost, do not cancel your auto insurance. Yes, as counterproductive as that sounds, the way car insurance is structured, you might lose more money in the long run that you save. If you cancel your insurance, you cannot drive your car, even in emergencies. Plus, once you do reactivate your insurance, the monthly premium will likely increase due to the gap in the insurance coverage. Lastly, you might incur a cancellation fee or other costs.
The deductible is the amount you pay from your own pocket before the insurance coverage kicks in. By increasing this amount you are saying you will be liable for a higher payout in case of any damage, this reduces the liability of the insurance provider and drives the premiums down. Since the number of cars on the roads are considerably lower than usual, you can also lower your liability coverage (in case you are at fault) to lower your premium. But increasing your deductible is much more effective at lowering premium than decreasing liability.
Insurance companies like Root and Metromile offer usage-based plans that track your car usage via an app and give you an insurance rate depending on that. There also exist pay-per-mile plans that provide you with a base rate and then charge you according to your usage above the base usage. You can check with your insurance provider if you can avail such plans with them.
The state of California is the only state so far that requires providers to refund money to individuals and businesses for the period of March–April unless the social distancing is extended. Allstate is providing a shelter-in-place-payback which is refunding customers 15 percent of the premium for the period April–May. State Farm is offering a 25 percent credit, while Geico will be offering a 15 percent discount on customers’ next full policy term. Progressive and USAA are offering up to 20 percent credit on two months worth of premiums. So ensure you check with your provider on how you can lower your premium during this time.