National Insurance Awareness Day

Most people are unaware that June 28 is National Insurance Awareness Day. The objective of the day is to remind you to review your insurance policies annually and make any changes should your circumstances have changed. 

In the midst of the COVID-19 pandemic, it’s especially important to contact your insurer to review your policy, negotiate rates, or consider switching to a different insurance plan.

How Has COVID-19 Impacted Auto Insurance?

COVID-19 had an immediate impact on the auto insurance industry as the country responded to the call to stay home. Fewer people shopped around for better insurance rates or took out new policies. Unemployment skyrocketed, and some struggled to keep up with monthly premiums. The insurance industry responded by offering short-term rebates and premium relief to policyholders who suffered a loss of income.

As a result, the auto insurance industry saw a sharp decline in business growth. Insurance shopping declined to -11% year-over-year growth, and new business volume growth dropped a massive 52% compared to the same quarter in 2019.

Will There Be Changes to Auto Insurance After COVID-19?

As the nation starts to mobilize again, how will auto insurance be affected, and what changes can you expect to see? A lot depends on how quickly the economy rebounds and unemployment rates drop and how driver behavior changes. 

Early data shows that despite less traffic on the roads during the lockdown, motor vehicle fatalities rates actually increased by 14% in March compared to last year. Speeding was the main culprit. Quiet roads became a playground for speed freaks and street racers. Should reckless driving continue, insurance rates are likely to increase.

Mckinsey & Company have come up with four post-COVID-19 scenarios that may impact how auto insurance companies move forward. In the best-case scenario, the economy rebounds quickly, and driving behavior is cautious. In the worst-case scenario, the economy suffers an extended decline with an increase in aggressive drivers. Insurance companies will have to adjust their rates and policy rules according to where we land on that continuum.

How Can You Save on Auto Insurance

For many struggling to get back on their financial feet in the aftermath of COVID-19, owning a car will become tougher. According to AAA, the average annual cost of vehicle ownership in 2019 was $9,282, or $773.50 a month. One way to cut costs is to lower your insurance.

Choose a Different Insurance Plan

In addition to high unemployment rates that may take months or years to turn around, remote working may also be adopted by many companies. That means fewer drivers commuting to an office. If you’re unemployed or want to continue working remotely, you can negotiate a lower rate with your insurer. Alternatively, switch to a pay-per-mile insurance plan. 

Shop Around for Lower Rates

As National Insurance Awareness Day approaches, now is a good time to review your insurance policies and compare insurance quotes. If you find a cheaper insurance rate, inform your insurer. To retain you as a client, they may be willing to meet or better the quote you’ve received. 

Take a Defensive Driving Course

If bad driving habits like speeding continue, getting back on the road amidst COVID-19 can become more dangerous. More car crashes are likely to happen. With that comes a spike in insurance claims, followed by an increase in rates. 

Continue to practice safe driving and don’t speed. We advise taking a defensive driving course that can teach you techniques to mitigate collisions. Most insurance companies will lower your rate when you take a defensive driving course. Teens can also benefit from lower rates if they take a driver's ed course. 

Reviewing your insurance policies annually is a good habit to develop. Always inform your insurer of a change in your circumstances, and don’t be afraid to negotiate rates.