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Save up to 70% on Car Insurance Due to Social Distancing

Has the coronavirus forced you to work from home or caused you to lose your job? If so, social distancing and sheltering-in-place can dramatically reduce your car insurance price. What started as “flattening the curve” of COVID-19 is now a serious financial hardship for many Americans.

While Americans suffer, car insurance companies are minting money. The reason, people aren’t driving. Therefore, they’re not having accidents. As we adapt to this new normal, there is an opportunity to save money — a lot of money — on car insurance.

Car Insurance Savings of Nearly 70% due to Social Distancing

We looked at multiple scenarios. Here’s a summary of two common scenarios and the associated savings.

  • Scenario 1: Single, 30-year old female, one car, commuter, saves 20% to 65%, depending on coverage changes.
  • Scenario 2: Married couple, 45-years old, 16-year old daughter. Two cars for commuting, saves up to 80%, depending on coverage changes.

More information on these two scenarios is included below in the section titled “Scenarios we Analyzed.”

How much can social distancing save you?

How much you can save is directly related to how the vehicle is used. Click here to be taken to our car insurance calculator. The calculator will estimate the savings you deserve.

Estimating COVID-19 savings on car insurance

The highlighted radio button indicates the vehicle is not used to commute. The scroll wheel specifies annual mileage when not commuting.

Radio buttons let you select how the vehicle is used. With the new social distancing, select the use as “for pleasure.”  The scroll wheel to select the annual miles you drive. With social distancing, miles could be quite low.

Scenarios we Analyzed

We analyzed several scenarios. Fundamentally, the change in rate comes down to your new driving routine. The following is more detail on the two scenarios we summarized above:

Scenario 1: Commuter driving more than 15 miles per each way to work. Their current insurance coverage is 50/100 liability with collision and comprehensive. This person is no longer commuting and estimates their new mileage is less than 3K per year. They need to make the following changes to their insurance coverage:

  • Driving “for pleasure” rather than commuting
  • Reduce the annual mileage to 0 to 3K.*

Savings = approximately 20%

*Note: not all insurers use driver reported mileage for rating.

Modified scenario 1: Same driver as scenario above, plus the more aggressive modification listed below:

  • If the vehicle is owned, canceling collision and comprehensive insurance is an option. Liability coverage was maintained at the same level as prior to the coronavirus.

Savings = as much as 65%

Scenario 2: A family with two cars and a teenage driver. Both drivers commute more than 15 miles to work. Their current insurance coverage is 100/300 liability with collision and comprehensive. Now neither of these drivers are commuting. To maximize the discount, they need to make the following changes to their insurance coverage:

  • Driving “for pleasure” rather than commuting, for both cars
  • Reduce the annual mileage to the minimum level, for both cars*
  • Make sure the drivers whom are most expensive to insure are assigned to the least expensive car to insure

Savings = as much as 35%

*Note: not all insurers use driver reported mileage for rating.

Scenario 2 modified: Same drivers as scenario 2 with the more aggressive modifications listed below:

  • If there’s no loan or lease, cancel collision and comprehensive insurance and maintain liability. In order to drive the vehicle, maintain liability insurance. The other vehicle can be parked. When parked, liability insurance can be canceled. Keep collision and comprehensive if there is a loan or lease, or you cannot afford to pay for repairs.

Savings = as much as 80%

Assuming your driving habits return to what they used to be, you will need to let your insurance company know. When that occurs, your insurance rate will increase accordingly. No one knows when that may be. In the meantime, to quote an insurance company ad “only pay for what you need.”

What will my insurance company say?

We’re pleased to report some companies are starting to announce near term rebates. This is laudable and carriers making such moves deserve to be commended. However, ValChoice estimates that loss costs will be reduced by a much larger dollar figure than the reductions that are being offered. ValChoice also believes the reduced lost costs will be on-going, not merely a near-term effect.

Bottomline: if you’re no longer commuting, you deserve to pay less. Why should you pay a higher rate for a risk that you no longer present? It’s not fair to charge consumers a higher rate just because they used to drive more miles per day. Here’s an analogy. If you went to the grocery store and bought ice cream, you would pay for the ice cream. The next time you go to the grocery store, you don’t buy ice cream. However, they charge you for ice cream anyway. Why? Because you bought it last time. Of course you wouldn’t pay for the ice cream that’s not in your cart. Similarly, don’t pay for the risk of miles you used to drive that you no longer drive. That makes no sense.

What if I have to change insurance companies?

First, if you’re buying insurance from a company that advertises on TV, you’re probably not with a great insurance company. Is that what you want when you buy insurance? After all, if an insurance company won’t pay a claim, it wasn’t insurance. Instead, it was a waste of money. That’s like paying for the ice cream that you didn’t take home. You wouldn’t pay for it just because it’s on sale if you aren’t allowed to take it home.

ValChoice rates over 1,000 car insurance companies, in every state where they do business. We know which companies provide the best value. Even better, we publicly name the five best companies in each state.

How ValChoice Helps Consumers

Our belief is the best way to help consumers is by providing tools and information that helps them make good decisions. Consumers are smart. With easy-to-use tools like ValChoice offers, consumers know when they need to find different insurance, what price is fair and if they’re getting they’re getting a good value for the money. There’s no more powerful force than a consumer deciding where they are going to place their business. We help all consumers do this free and easily.

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