A common question we are getting right now from clients are what relief options are available now that that they aren't driving their vehicle as much.
Some companies are offering a rebate of 15-25% of a months auto insurance payment.There is no action required on your behalf as the client, this rebate will automatically be applied to your monthly payment plan, or you will receive a cheque in the mail. Some companies have these changes slated for June so please pay attention to any mail you get from your company.
Every other company is still working to quantify the impact of this temporary decrease in use.
Where the vast majority of people are saving is if they have two cars in the house and they reduce the vehicle they aren't using to just fire and theft coverage.
This is where you are seeing the "I saved 75% on my car insurance”. It’s not a rebate, people are removing coverage. For vehicles that are leased or financed, reducing coverage isn’t an option because it’s part of the lease/finance agreement to maintain full coverage on it. In this case, we can remove your commute and reduce your yearly kilometres driven, and that will save you somewhere in the ballpark of 3-8%.
Where companies are doing more is payment options and managing missed payments. If clients aren’t able to make a payment or would like to defer a payment, they have more flexible options in terms of paying it back to avoid double withdrawals. Many companies are waiving NSF fees, and people who were on full payment plans for the year are able to switch to monthly installments at no charge. This is where he majority of the ‘help’ is coming from insurance companies. They are also not cancelling policies for non payment during the State of Emergency.
Coverage wise, the majority of premium comes from the accident benefits and liability, a smaller portion (few hundred a year) comes from collision and fire/theft coverage, an even smaller portion comes from "frills" like rental car coverage ($50/yr approximately) and then the smallest impact to premium is vehicle use (whether you commute or how many kms you drive in a year). Due to people working from home, it’s just the vehicle use that is impacted. If you are only driving to the grocery store, you still need the AB/liability in case you get in an accident and are injured or injure someone else, and you still want your car to get fixed.
If you have questions that are not answered here, or you'd like to make some of these changes to your policy, please contact us via phone or email.