As we approached 100,000 deaths in the US, there is no doubt the Corona virus has deeply affected each of us. When looking at COVID-19 through the lens of the insurance industry, it has been widely affected as well.
One the most public areas of adjustments made by the insurance industry was made in the car insurance space. With stay at home orders in place, we are no longer embarking on our daily commutes or jumping the car to drive two states over to visit family. This means we are driving significantly less. Many insurance companies such as Allstate and eSurance have now begun offering discounts or ‘paybacks’ to their customers. Allstate for example has begun direct depositing up to 15% of your monthly payment back into their customers bank accounts.
At first glance, this is great news. It is money back into our pockets. But when you look at it further, is 15% really the right amount to refund their customers? For many people during COVID-19, our driving is limited to going to the grocery store. So cars that may have driven anywhere from 10-50 miles each way everyday during a commute are now being driven 5 miles per week. Many consumers actually considered canceling car insurance for one of their cars if they lived in a two car family household. So theoretically, there may have been even more savings available to the average consumer. But with this money coming ‘back’ to the consumer, it prevented many people from taking this action.
Our recommendation is to still go and speak to your insurance agent. It may make sense to address other aspects of your coverage if you are not driving to and from work any longer. If you happen to work for a company that will switch to remote working full time going forward, you 100% need to change your car insurance coverage.