Since COVID-19’s keeping us from driving while it’s ruining everything else, you might as well see if you can save money on car insurance. It’s possible that you could be paying less if you’re doing fewer miles this year. Or, maybe it’s time to adjust your own risk assessment.
The cost of your car insurance is calculated by a lot more than just your personal driving record and how much coverage you want. Where you live, what kind of car you have... We could do a whole investigation into how these algorithms work, but for now let’s focus on what’s changing for most people: Annual mileage.
Hit up a rep at your insurance company and see if you can get a reduced premium on account of the dramatic reduction in mileage you’re going to be doing this year. It’s possible that your insurer will only make said adjustments at renewal time; I have State Farm covering four cars right now and the company’s people told me that I can only change my mileage every six months. (I have not yet asked if they’ll make an exception for the pandemic, and I’m not holding my breath.)
But, maybe your insurer is different or maybe you’re coming up on renewal time for your own policies! It’s worth asking. I do have lower premiums in general on a couple of cars because their annual mileage is so low, which is the only way I even know this is a thing. I have to self-report the odometer reading every six months.
If you find you can’t change your mileage at the moment but you’re still looking to cut costs, maybe it’s time to lower the insurance coverage you have. Insurance companies decide how much to charge you by assessing risk, you do the same thing when you decide what level of coverage to get.
The calculus pretty much boils down to: Pay for cheap insurance and maybe owe a lot of money if you get into an accident, or get good insurance and pay a lot of money every month but not have to worry if disaster strikes.
Now, I know as well as anyone that you can’t predict when you’re going to need or want good insurance. That’s why insurance exists, after all. And not to be cliché, but sometimes shit goes down when you’re least expecting it. So I’m not going to explicitly advise anyone to lower your car insurance coverage to save a few bucks in the short term.
But this is a good time to reevaluate your personal car insurance situation. Got a second car that’s not going to get much action during this pandemic? Maybe you don’t need full comprehensive and liability coverage on it. Got a whole car collection that’s definitely not getting exercised for the foreseeable future? Maybe you want to suspend coverage on some of your cars altogether if they’re just getting mothballed.
Even if you’re only driving to the grocery store and back twice a month, there’s still a chance you could be in an or cause a car accident. But that chance is a lot lower than it would have been if you’re not doing a daily commute or pleasure cruising anymore. So maybe, to you, it’ll be worth the risk of carrying lower coverage.
More pitfalls to consider: Bad stuff can still happen to your cars while they’re sitting static in your own garage. And if you’re not paying insurance on them, you’re not going to be covered. Also, if your cars are uninsured but still registered for road use, there might be state-imposed fines for keeping license plates on them but dropping insurance.
Another thing you need to consider is whether or not there’s a lien on your car. If you’re making payments, it’s possible that carrying a certain level insurance coverage is a condition of your loan. So make sure you know what’s going on there too before making any coverage reductions.
The real point here is: Educate yourself on exactly what you’re paying for when it comes to insurance. Even if you already did when you picked your policy, the coronavirus sidelining a lot of cars makes this a prudent time to revisit it.
There are too many variables and personal situations out there for me to comfortably dole out auto insurance action plans for everyone. But everyone’s going to be looking to save coin in this time of catastrophe, and your car insurance coverage is something to reconsider at this point.