Insurance Costs and the Age of Coronavirus
Due to the COVID-19 pandemic, and aside from the obvious concerns around health, many people are feeling the stress of their personal finances as they look for ways to reduce their bills and save money during this period of uncertainty. One such area of savings could come from the reduction of auto insurance premiums.
Since most American households have at least one vehicle, this is a cost that virtually everyone has to include in their monthly budget. But with the unemployment rate currently at over 10 percent and millions of people working from home due to office closures and stay-at-home orders, the time spent driving on the road has fallen off drastically. According to Arity, a mobility data analytics company, and reported by NPR, some states saw mileage drops of more than 60 percent when the pandemic first began.
Although miles driven are steadily increasing around the country, they are still well below normal levels. With less vehicles driving less miles on the road, there are far fewer accidents these days, which means insurance companies are paying fewer claims. When claims drop, so do premiums. Some insurance companies are passing this savings down to customers in the form of lower premiums and rebates. But even after COVID-related premium reductions, many drivers may still be overpaying for auto insurance.
Although the insurance rates themselves are not negotiable as they are based on each company’s actuarial formulas factoring criteria such as age, geography, driving history, and credit score, there are several proactive steps car owners can take to lower their monthly car insurance costs.