With the start of the Covid-19 pandemic we were bombarded with many questions as how can I save money on my Auto Insurance?
As many of you know auto insurance is always a hot topic and a usual political nightmare. It is easy to see why many companies who offered the product, as well as governments who regulate the product, seem to always want to stay away from it and leave discussion at a minimal amount.
Well, today, we're going to take the Band-Aid off and get into some questions on how you can save money on your auto insurance during the pandemic.
1. We are all driving less
This one seems obvious but many people delayed as they did not have any idea how long the potential lockdown would last. So, they hesitated before calling their insurance company or broker to request a discount for the change in usage of their vehicles.
One thing you can do as a consumer is to ask your company or service representative to go back as far as possible to win first started to use your vehicle less.
Some companies will even go back as far as 30 days. However, if you don't ask, they will go from the time they first received the phone call.
Use this tip to help save you some money on your car insurance premium.
Most of the companies will offer a suspension of coverage for your vehicle.
Most customers who request this suspension of coverage for their vehicles usually have another vehicle that they can still use during this current crisis.
The legal name of the form is OEF 16/17. This is the form the insurance industry uses to suspend your vehicle for a period of time. Many companies require you to suspend the coverage for at least 45 days for you to receive the benefit of not driving your vehicle on a regular basis.
Should you cancel the suspension of coverage before the 45 days has expired?
The company will go back to the original premium and you would receive absolutely no benefit.
Some companies will not reduce the premium at all, even though you asked for the suspension of coverage.
1. They will wait until you decide on the date to reinstate the coverage on the vehicle.
2. Then the insurance company will apply the discount to see if you fulfilled the 45 day requirement. Some companies will give you the discount the day you ask for the suspension of coverage.⠀
The insurance company will only add the premium when you put the coverage back on your vehicle and begin to use your vehicle on a regular basis again.
2. Raise your deductible
This part is twofold as many people see that the risk for using their car has drastically reduced since they are no longer commuting to work. The vehicle is staying at home and used mainly on weekends for pleasure use and picking up groceries. Some have decided to raise their deductibles, so that they can save money on the premium for the few months that they have been at home. Some have even gone as far as to remove the physical damage cover on their vehicles due to the reduction of the risk of not driving their vehicle to their place of work.
This is another way to save money on your auto insurance. Although, there is a trade-off that you do not have any coverage on the vehicle to replace the vehicle itself if you have an accident that is found to be your fault.
On March 16-22 prime minister Trudeau address the nation to discuss the need for communal social distancing and self-isolation.
The prime minister of Canada made a Declaration of Emergency. This Declaration made it not possible for the insurance company to cancel your insurance policy for up to 120 days or less if the emergency declaration was lifted before then. This has led to all kind of concessions by the insurance companies to help with those going through financial difficulty.
This is important information, even though it doesn't directly reduce the premium on your auto insurance.
It's important because it means that the insurance company would not be allowed to cancel your policy if you have a missed payment during the emergency declaration.
Another important factor that didn't necessarily save money but helped many policyholders to earn money was the loosening of the restrictions, concerning using your vehicle to work for one of the many take-out food distribution outlets.
This was a risk that one frowned upon by the insurance company, but due to the pandemic and mainly due to financial necessity of many people the insurance company relaxed this rule. We will have to wait and see what happens when the pandemic slows down and if this relaxation will still be in effect.
Many companies did have some measures to help those who are struggling with their insurance payments
1. One of those methods was that if you have a non-sufficient funds incident with your payment, many of the the insurance companies decided to not charge you fees for the NSF.
2. Some companies were also deferring your monthly premium payments, so if you're in some sort of financial difficulty, the payments could be deferred. This means that, of course, they double up later on, hopefully, when most people are back working.
3. Some companies offer a 10% disk on your premium.
4. Some offered more, and believe it or not, some offered less or none at all. The best way to find out the answer to this is to check with your broker and ask what the particular company you are insured with is doing for the policyholder. This was something that probably will be remembered when good times come on. I believe the consumer should support those that supported the policyholder when things were down.
Overall, the majority of companies did have some sort of help for the consumer during this pandemic.
Feel free to contact our office at 905-683-2323 if you have any questions and join our newsletter to keep updated on the latest developments.
Bethel Insurance Brokers Inc.