The COVID-19 pandemic has impacted every part of daily life, from sheltering in place to lost paychecks. While car insurance is no exception, the good news is that every major provider has pledged to help Americans in need like never before. To separate fact from fiction, we spoke with experts and analysts across the country to determine exactly how the coronavirus crisis will affect your car insurance.
Is my insurer going to give me money back?
As of March 22nd, the number of cars on the road had fallen dramatically, about 20%, following the declaration of a national emergency in the U.S. Many of the largest auto insurance companies recently announced they will be responding to the lowered risk of auto claims with premium rebates for customers.
State regulators are also putting pressure on all insurers to step up to support consumers with measures like extended grace periods, so if your insurer hasn’t yet responded with meaningful actions, you can routinely check its website to catch updates or reach out directly.
Should I change my auto coverage because of COVID-19?
While you can definitely reach out to your insurance company to see if your lowered mileage could mean a discounted rate, keep the following in mind: Don’t cancel coverage you’ll need in the future. Canceling your car insurance, even if it’s only for a limited period of time, can have several negative impacts:
How can I lower my monthly payments?
Increase your deductible
Your deductible is the amount of money you agree to pay out of pocket before the insurance coverage will kick in. Increasing your deductible helps lower your premium because you’ll be on the hook for a larger part of any potential losses, but that also means saving on your bill now is something you’ll need to weigh with your ability to take that additional risk.
Reduce your liability coverage limits
Lowering your liability coverage limits can also help you save on insurance, but it will likely make a smaller dent than changing your deductible. Your car insurance coverage will have both bodily injury and property damage liability, or the maximum amount your insurance company will cover, if you cause damage to someone else or their property.
Switch to a usage-based plan
If you’re driving fewer miles than usual, you may want to consider a usage-based car insurance plan. While traditional car insurance is priced using factors like your age and claims history, usage-based insurance relies on driving data (usually gathered through an app on your phone) to determine how much you pay for coverage.
Many larger insurers are starting to offer usage-based options. This option would be best for users who are likely to benefit from a usage-based policy for the long-term, though. Switching insurers too often can signal that you’re not a loyal customer, which can mean you may be quoted higher rates from even other insurers in the future.
Will my future auto insurance premiums be affected by COVID-19?
Most drivers are well aware that an increase in claims can spike car insurance rates, but the economy as a whole is also closely tied to an insurance company’s business.
Will auto insurance claims be affected by COVID-19?
With social distancing measures in place across the country, insurers are making sure their employees and customers stay safe by keeping the claims process digital. This may be a big change from a typically hands-on process or you may not see a change at all.
What if I can’t afford my auto insurance payments because of COVID-19?
If you are struggling with your car insurance premiums, you should contact your insurer. Many are addressing the COVID-19 pandemic with programs to assist policyholders.
For more information, please contact Theodore & Associates today.
As you make your way through your spring cleaning checklist, don’t forget to dig out your insurance policies and look them over. Below are some of the reviewable elements of your home, life and auto insurance policies.
1. Make sure you’re not overpaying for insufficient coverage
Experts say the top insurance mistake is being underinsured, which happens when you fail to update your coverage as your property, lifestyle or needs change.
Take the time to assess those changes and determine where you need to adjust your insurance coverage. For example, if you like to entertain at home, consider increasing your liability coverage and purchasing a separate umbrella policy.
Umbrella liability policies typically offer a minimum of $1 million of additional liability protection and cost just a few hundred dollars a year.
2. Pay attention to increased rates
Insurance companies don’t always tell you how much your rates increased on renewals. While doing your spring cleaning, grab last year’s documents and compare the rates for yourself. If your rates rose by five percent or more, call your insurance agent and ask them to explain the increase.
Knowing whether the increase resulted from changes in your risk profile or from general increases in the marketplace can help you negotiate and shop for comparisons.
3. Learn how to lower your premium
You may be eligible for discounts that can lower your homeowners insurance premium. Our golden rule is to ask! You may miss out out savings if you don’t ask what is available.
4. Make sure you have enough personal property insurance
Most people do not take the time to inventory their personal possessions, and often do not have enough personal property insurance as a result. Homeowners should be careful not to overlook their belongings as a way to keep insurance costs down.
It is very likely that you have added new belongings to your home over the last year. If so, now is the time to inventory those belongings and ensure you have the right type of coverage for the actual value of your property.
Most consumers automatically accept the amount of contents coverage named in their policy. Instead, read the policies carefully to make sure there are no gaps in coverage, and check the dollar limits and excluded causes for personal property.
It is in your best interest to raise the dollar limit if necessary, as it will help you better replace or recover the value of your possessions if disaster strikes.
Having an updated list and video footage of your belongings could help you recover the true worth of your belongings.
If you have a life insurance policy, you should make sure to review its principal points at least once a year, including beneficiary, benefit amount, term, loans and cash value.
1. Update your beneficiaries
Many of us forget to update our policies when circumstances change. Life events such as marriage, getting divorced or having children should prompt you to update your beneficiaries. The beneficiary designations on your life insurance policy will trump any other documents you’ve created outlining your beneficiaries, so ensure that they match!
2. Review the term of your policy
If you have term life insurance, it’s important to know when the term ends. An annual review will prevent a term policy expiration from sneaking up on you. If you are caught unaware, you may face a major premium hike.
Some term policies may be convertible to permanent insurance on their anniversary, which others may be convertible at the end of their term.
3. Assess the amount of your policy
Make sure the amount of your life insurance policy is still appropriate for its intentions and for your financial situation.
Take time to evaluate what you intend for the benefits to cover. Are you hoping to fund your burial expenses, or provide college tuition for your children? Does your policy provide sufficient coverage for these needs? If not, it may be time to look into additional coverage.
If your personal wealth has increased significantly in the last year, you may consider more life insurance in order to protect your family from estate taxes.
1. Reassess your comprehensive/collision coverage
If you have collision and comprehensive coverage, take time to make sure the limits are adequate, or whether you still need it. If you don’t have the coverage, consider whether it’s time to add it.
If you’re driving an older car worth less than $1,000 – or less than 10 times the insurance premium – having comprehensive or collision coverage may no longer make sense. Dropping either the comprehensive or collision coverage may reduce your premium.
2. Ask about any new discounts.
Ask about any discounts that you may qualify for, such as:
For questions about your insurance or to get a quote, contact us today!
Nearly 17 million people have filed unemployment claims in the last three weeks with the U.S. Department of Labor. Forecasters predict as many as 20 million people could lose their jobs by the end of April. Millions of workers who have lost their jobs also will lose their health insurance. The potential severity of COVID-19 means that being uninsured could leave people at risk for catastrophic health care costs. Here are some key things people who lose their jobs or who are currently uninsured should know.
Coverage Options for People Who Lose Their Jobs or Are Uninsured
If you have insurance through the job you lost: Maintaining your coverage through COBRA is a possibility, but you might find a cheaper option through the Affordable Care Act’s marketplaces. As always, even though open enrollment is closed, anyone who loses a job with health insurance is automatically eligible for a special enrollment period through the marketplaces. The first thing to do after losing job-based coverage is visit HealthCare.gov to check out options. If you qualify for a premium subsidy or Medicaid, there may be options much cheaper than COBRA.
If you have coverage through the ACA marketplaces: If you lost your job, your income is likely dropping, which means you may qualify for a subsidy. Go to HealthCare.gov and update your income information.
If you have coverage through Medicaid: Keep your coverage and make sure your enrollment status is up to date, so you don’t lose your coverage if you forget to reenroll.
If you are uninsured, you have a few options — and there may be more in the coming weeks:
Recent Legislation and Executive Branch Actions on Coverage
Congress has passed three major emergency spending bills to address the pandemic and the administration has declared a national emergency. Here is what you should know about what this means for coverage:
The staggering economic disruption triggered by the coronavirus pandemic is revealing the importance of the Affordable Care Act in providing coverage options for people who lose their job-based insurance. But the pandemic also shines a bright light on the remaining holes in the system: 30 million people uninsured and at least 44 million who are underinsured because of unaffordable deductibles and copayments. The crisis will place added pressure on the states that have not yet expanded Medicaid and may encourage them to move forward with expansion. It also may push Congress to permanently patch the holes in our insurance system. If it does, the next time we face a public health crisis we can be secure in the knowledge that everyone has health coverage and that illness will not be compounded by personal financial catastrophe because of health care costs.
If you need assistance or don't know what your next step should be, feel free to call us and get help. We can offer Short Term Health Plans, Limited Medical Plans, and Major Medical Plans with loss of other coverage, to individuals who may be in need, or just offer friendly advice during this difficult time!
Your building is now vacant due to Shelter in Place
Key Tips to Consider...
As we weather this national crisis and shelter in place, many of our buildings and surrounding property are attractive targets for thieves and other would-be criminals. Before shuttering your doors and leaving your business for, what could be, weeks at a time, consider these tips...
• Are unnecessary electrical appliances and equipment disconnected/unplugged.
• Turn down temperature on hot water heater to conserve energy.
• Set thermostat to minimal setting (55° F) to conserve energy but keep out the freeze and/or set low temperature alarms. Failing to maintain heat appropriately can void coverage if pipes freeze and burst.
• Sprinkler system also need to be protected from temperatures below 40F to ensure proper operation.
• During warmer months or in warmer climates, make sure to set your air conditioning to a minimum of 85 degrees
otherwise if your building gets too warm it will become susceptible to damage from humidity and mold.
• Check that sump pump is operational and remote alarms are working.
• Ensure all refrigerators and freezers are secure and doors are closed.
• Irrigation systems should be turned off and disconnected to prevent accidental flooding.
• Does the building look secure from the street?
• Are all vehicle entrances and exits locked/secured?
• Are all windows and doors locked?
• Have you contacted the police and requested random checks?
• Have you alerted neighbors or neighborhood watch programs that the building will be vacant so they can also assist with random check?
• Is there a centrally monitored security system in place (door contacts, window tape, motion sensors, video surveillance, etc….)
• Has updated contact information been given to companies that centrally monitor security and fire alarms, as contact names/information may have changed from normal operations.
• Arrangements should be made, if possible, to inspect the building at least weekly. Document the inspection with photos and utilize our check list.
• Can security camera be added or maintained operational to cover the interior/exterior of the facility?
o Have temporary, wireless cameras been considered?
• Are there exterior aspects of your building that you need to consider:
o Temporary weather proofing;
o Drainage or flooding hazards;
o Gutters and down spouts cleared?
• Contact your agent to discuss potentially relocating some high dollar items, temporarily to a more secure location.
• Do you have a list of inventories on hand?
o Is it backed up off site?
o If it were stolen or damaged what would you need for lead time to replace those items?
• Tools and Equipment
• Computers and Technology – Are there backups made daily with offsite storage of back-ups?
• Furniture, Artwork, Fixtures.
• Other Assets
• Do you have products on auto-order that needs to be suspended for the time being?
• Are you practicing all the necessary requirements per your local health department or FDA guidelines?
• Do you have a remote alarm on refrigerators and freezers so that you are made away of a temperatures spike?
o If this were to occur do you have a plan in place for dealing with this alarm?
• Are you maximizing the products on hand to consider items reaching expiration?
• Have you contacted the local fire department to alert them of the vacancy and any changes to building access that now may have changed?
• Additional monitoring may be necessary because of the following reasons:
o There may be a delay in reporting of fires because of the vacancy
o Fire could also start due to smoking trespassers, arsonists, faulty wiring or drug production.
o Transients/homeless seeking shelter may have open fires for cooking or providing heat.
• Are there centrally monitored fire detection systems in place?
• Is the Automatic sprinkler system on and locked open with centrally monitored tamper switches operational?
Making a plan for how to respond
Having a good response plan is as essential as protecting your business investments. When developing a plan, consider communication beforehand with local responders, such as fire and police departments, emergency clean-up companies and security companies. Your livelihood may depend upon it in an emergency.
And remember, if you have a helper with you when closing down, be sure to “social distance” from one another.