The COVID-19 pandemic has touched millions of Americans in different ways, including how we use our cars.
Since many people are stuck at home these days and not driving much if at all, auto insurance carriers are now fielding many questions about car insurance policies and whether they should be changed during this period.
Money is tight for many, so it’s understandable to want to save where possible.
Before you make any changes to your auto policy if socially isolating at home, learn the facts to see how it would affect you.
COVID-19, Social Distancing, and Driving
Due to the COVID-19 pandemic, much of the U.S. population has been forced to stay at home to reduce the number of people in public who can continue to spread the virus.
Only essential workers are on the roads in many cities and states, with a large portion of the population either working from home or not working at all due to closures.
As a result, many cars have been sitting unused for weeks, leaving policyholders wondering whether they should be paying for car insurance during this time or if they should change their policies to save some money.
Though that may seem like a great idea especially in a time where the inability to work has seriously affected so many people, it may not be the best idea.
Is Auto Insurance Necessary When Socially Isolating At Home?
There are a few important factors to consider before calling your auto insurance agency to cancel your policy or reduce your coverage:
Are You Driving At All? - Even though you might be unable to work or working from home, chances are you’re still making trips to the grocery store to buy food or going out for other necessities, however infrequently that may be.
Does Canceling Affect Your Driver's License? - Some states, Texas being one of them, require all drivers to hold active car insurance policies to be able to drive any vehicle, not just their own, so canceling a policy could affect your licensing.
Do You Have Full Coverage? - While it’s less likely that anything will happen to your car with such limited use, could you afford it if something did happen during that 5 mile trip to the grocery store or something random and unexpected happened to the car while sitting in your driveway?
Is Your Vehicle Financed? - Most lenders require you to have full car insurance coverage on any vehicle that you have financed.
Many Auto Insurance Carriers Already Sending Refunds
It’s true that many Americans are driving much less these days due to COVID-19 restrictions and auto insurance carriers have taken notice of this.
Not only has driver risk decreased substantially over the past month or so, but accident numbers have declined significantly as well.
Acknowledging this, many insurers have taken it upon themselves to return a percentage of policy fees back to their customers for the time period that much of the country has been affected by Social Isolation recommendations or actual stay-at-home orders.
Should You Change Your Car Insurance Policy?
Considering all of the above, auto insurance agencies recommend against making any changes to your car insurance policies since in most cases, you do still need that protection even for limited driving and/or to protect financed vehicles.
The amount of money you are likely to save by reducing or canceling your car insurance policy for a few weeks does not warrant the added risks in most cases, especially if you still need to get to the supermarket once a week plus it could void your license or put your vehicle loan in default.
Check your insurer’s website to see whether they have adopted a refund policy and will already be returning a portion of your premium to you!