Tips to Save on Auto Insurance During the COVID-19 Pandemic
Cutting expenses is always a good idea, but it’s especially important during these uncertain financial times. While you’ve probably already taken steps to reduce obvious things, like food costs and entertainment expenses, you may have overlooked bills you pay less frequently, such as auto insurance. Let’s take a look at how you can reduce auto insurance expenses during the pandemic.
Ask About Rebates & Credits
Many major insurance companies, such as American Family, Liberty Mutual, Nationwide and State Farm, are offering rebates or credits to their auto insurance customers. Because most of us are driving less and having fewer accidents, they are paying out less in claims, leaving them money to give back to customers.
Exactly how and when the rebates are happening varies by company (and by state). Some will be offering cash refunds, while others will be providing a statement credit, resulting in lower payments for upcoming premiums. Contact your insurance agent to find out if your insurance company is offering a rebate and how they’ll be paying it out.
Inquire About Grace Periods & Fee Waivers
Generally, insurance companies offer a grace period of up to 10 days if you’re late on a payment, after which they may cancel your policy. Plus, there are usually late fees and other fees associated with late payments. In the current climate, however, many companies are extending grace periods, not cancelling policies due to non-payment, and waiving late fees. And even if your company isn’t applying these measures across the board, they may be extending those courtesies to those whose incomes have been eliminated or reduced due to the COVID-19 pandemic. Be sure to ask your agent what concessions they’re willing to offer.
Set Up a Payment Plan
If you typically pay your car insurance in multi-month increments, see if it’s possible to set up a month-to-month payment plan. It will be easier to budget for the smaller amount, and you won’t run the risk of becoming uninsured because you can’t make the larger, lump-sum payment.
Raise Your Deductible
If you’re driving a lot less than normal, raising your deductible could lower your premium and help you save money. Keep in mind, if you do need to file a claim, you’ll end up paying more out of pocket. It’s a bit of a gamble, but it you’re really trying to cut costs, it’s an option to consider. Talk with your insurance agent about the possible effects of raising your deductible.
Double-Check Your Discounts
Are you currently enjoying all the discounts you’re entitled to? These can include:
- Multi-car or multi-policy discounts
- Safe driver discount
- Anti-theft discount
- New car discount (for vehicles less than three years old)
Check with your agent to make sure you’re receiving the appropriate discounts.
Think Twice About Canceling
If money is really tight, you may be tempted to cancel your auto insurance all together. But it’s not a good idea. Even if you’re only driving for essential errands once or twice a week, there’s a chance you could have an accident and face major expenses as an uninsured driver. Additionally, your vehicle is vulnerable to fire, damage or theft even when it’s just sitting in your driveway or garage.