Saving Money On Auto Insurance During The COVID-19 Outbreak

Insurance Professionals of Arizona | April 23rd, 2020


There’s no doubt about it – the COVID-19 pandemic has upended the American way of life. We’re wearing masks in public, canceling vacations, and working remotely. All of which means we’re driving less. 

Safe at home, with time on your hands, now is a great time to review your insurance policies. If the coronavirus has impacted your budget, here’s how to save money on your car insurance.

Relief For Drivers Struggling Financially Due To COVID-19

The coronavirus has significantly impacted the economy. Americans are filing for unemployment in record numbers. If you’ve lost your job, had your hours or pay reduced, or been furloughed, your car insurance company might be sympathetic to your situation. 

Call your agent and ask if your insurer has made any of the following options available to their policyholders affected by COVID-19.


Extended Payment Periods


When you sign up for a new policy, you can either pay in full or make monthly premium payments. If you chose to pay monthly, you might be worrying about that upcoming bill. Normally, insurers cancel your policy within seven to ten days of non-payment, but many are changing this during these unusual times.

Some insurers have allowed payment deferrals and have been waiving late fees.

It’s best to communicate your situation with your agent or carrier directly to make arrangements.


Waive Late Fees And Penalties


During March 2020, 22 million people filed unemployment claims. Unemployment offices have struggled to process claims. Swamped with phone calls and unable to approve payments, you could still be waiting to receive your first check. 

If you plan on paying your premium but can’t pay it on time, let your insurer know as soon as possible. Ask them if they’d be willing to waive late fees and penalties as long as you’ve paid by the end of the month. If they agree, it could save you money.


Payment Plans


Whether you need to catch up on late payments, or typically pay your policy in full but have lost your job, setting up a payment plan could provide some financial relief. The average annual cost of car insurance in the United States is $1,416. That’s a lot of money to pay all at once, and dividing it into smaller monthly payments could give you more room in your budget.



Have You Maximized All Your Discounts?

Insurance companies offer discounts for two main reasons; they want to incentivize driving behavior which saves them money in claims, and they want to capture more of your business. If it’s been a while since you’ve reviewed your policy, you could qualify for a discount on your premium. Five minutes on the phone with your agent could save you 20% on your premiums.  

Available discounts vary by car insurer, but most offer these industry standard options.



Multi-Policy Discounts


Bundling homeowners insurance and car insurance is one of the primary ways that people save money on their policies. If you’re both a homeowner and an auto owner, but have your policies with different insurance companies, moving them under one insurer will likely lead to cost savings.

Multi-Car Discounts


The average household in Arizona has two cars. If both you and your partner insure your vehicles with the same company, you could be eligible for a multi-car discount. 

Has your adult child decided to shelter in place with you? Or maybe your college kid has come home for the time being? Think beyond a partner or spouse when trying to maximize multi-car discounts.



Car Safety


A car alarm, airbags, and other safety features reduce policy premiums. If you just bought a new car, it could be cheaper to insure because of safety features. Check your policy to see if it lists all your car’s features and, if not, ask your agent if adding them would save you money.



Good Driver & Low Miles


Car insurance companies offer good drivers discounts for being accident-free and having no speeding tickets because it saves them money – they’re unlikely to have to pay out on a claim. Some increase your discount if you install a monitoring device in your car or download an app that tracks your driving. Others base premiums off the number of miles you drive to and from work or in an average year.

Drivers who are working from home and sheltering in place could qualify for low mileage discounts. Older tickets and accidents roll off your record after five years for accidents in Arizona, but if you haven’t requested a recent car insurance quote your insurer might not have updated your record and premiums.



Increase Your Deductible


Many employees have transitioned to working from home during the pandemic. To reduce risk, people are having their groceries delivered, and traffic on the roads around Phoenix is down nearly 40% since mid-April. Even if you’re still driving, your odds of being in an accident have dropped dramatically, so why not increase your deductible to save money? 

Increasing your car insurance deductible means that you would shoulder more of the repair costs if you got in an accident. Therefore, a higher deductible leads to a lower premium. If you’re driving less and there are fewer cars on the road you have lower odds of getting in an accident. 

Increasing your deductible until the crisis has passed likely has less risk than under normal circumstances and could lead to lower out-of-pocket costs.



Suspend or Cancel your Car Insurance


Car insurance companies have systems in place to suspend insurance if a service member is deployed or a child goes to college but leaves their car at home. If your car has been sitting in the garage for the past two months, it might be possible to suspend insurance. Given that your car is still with you, and the insurer cannot guarantee you won’t get behind the wheel, this could be a hard sell. 

Of course, you could always cancel insurance entirely. This is very risky, however. What if you need to drive to the hospital, or handle another emergency? Even if your car never leaves your garage, it wouldn’t be covered in case of a fire or vandalism. Not all vehicular risks happen when driving.

As well, canceling coverage now could cost you later. Insurance companies view a lapse in coverage as an increase in risk. When you try to re-insure your car in a few months, you could pay higher premiums that wipe out any cost savings now.  

Before making any changes to your policy, reach out to an experienced insurance agent. They’ll know where you can save money but remain adequately covered.



Do You Have Any Questions?

Do you have more questions about how the COVID-19 virus is affecting your auto insurance policy? Our team of insurance professionals is ready to take your call and address your concerns. Call us at (480) 981-6338 or email info@insuranceproaz.com for more information about savings, changes, and adjustments that affect your car insurance due to the coronavirus.

Also, if you are looking to save more money on your insurance, consider bundling your home or renters insurance with your auto policy. We would love to help you save even more money on your insurance policies.

Stay safe, healthy, and COVID-19 free!