These are uncertain times for individuals and organizations as they navigate through the ongoing COVID-19 pandemic. Millions of Canadians are in their homes under lockdown, and businesses are closed across the country. While self-isolation is key to slowing this pandemic, it is important to manage your finances and cut back on expenses like your car insurance.
What Auto Insurers Are Doing to Help
Ontario’s finance minister, Rod Phillips stated that auto insurers should lower auto rates to help out consumers that have been impacted by the COVID-19 pandemic. However, auto insurers complained that regulatory roadblocks were preventing them from offering auto insurance rebates. Now that the roadblocks are removed, a number of auto insurers have all offered rebates and relief measures.
- Aviva Canada – It is offering $100 million in relief measures for drivers. This means that drivers who stopped driving can reduce their auto insurance premiums by up to 75%.
- Allstate Insurance Company of Canada – One-time payments will be sent out to qualifying drivers by May of about 25% of their monthly auto premium.
- Desjardin – Refunds will be offered to drivers who have been impacted by COVID-19 as a result of self-isolating. The refund will be based on a three-month period and will depend on the annual distance travelled.
- Intact – It is offering $40 million in relief to help drivers experiencing financial hardship. For drivers who are driving less, a 15% reduction will be applied on their auto insurance premiums for up to three months. Drivers who have parked and stored their cars at home will be eligible for a 75% reduction. Missed payment fees will be waived. A total of $150 million in rebates will be issued.
If you’re not an essential worker, it’s likely you will use your vehicle less during the coronavirus outbreak and can receive insurance discounts. Here are 6 tips for savings:
- Get Usage-Based Insurance
Usage-based insurance (UBI) should be something you consider even without the COVID-19 pandemic. This option allows you to get discounted auto insurance rewards based on how you drive and use your car. UBI is becoming increasingly popular amongst motorists in Canada and more insurers now offer modular coverage solutions.
UBI premiums are determined by driving habits such as speed and braking, but insurers also consider how often you drive, when you drive, and how far you travel. You can choose between two types of UBI when signing up for coverage: Pay-as-you-go and pay-how-you-drive. It is worth talking to your insurance broker to find which policy you are eligible for.
- Reduce Coverage
If you will be driving your vehicle less during these times, check your policy and see if there are areas you don’t currently need to be paying for. It may be worthwhile to reduce your auto insurance to the basics and increase it again when the lockdown controls ease. Make sure any reductions you make comply with minimum auto insurance legislation in your province. Your insurance broker will be able to help you understand minimum coverage requirements.
- Manage Your Deductibles
A deductible is a policy agreement between you and your insurance company. It states the amount you agree to pay upfront before the insurer will payout on a claim. For example, if the deductible is $1,000, you must pay this amount before the insurer will activate coverage when you file a claim.
Higher deductibles result in lower monthly payments because the insurance company assumes less risk. During the lockdown, you won’t be driving your vehicle as much, if at all, so you are less likely to be in a collision.
- Remove Named Drivers
During the imposed lockdown for COVID-19, whole families are indoors and not using their vehicles. If you have a spouse and/or child sharing your auto insurance, they could be excluded from the policy. Family car insurance plans are not uncommon, but if some family members (for example your teenager) are not using the car, removing drivers can bring a reduced premium.
- Only Insure One Vehicle
It’s not uncommon for Canadian families to have two cars. With the strict quarantine possibly extending into months, it may save on auto insurance payments if you suspend coverage on one car.
Of course, this means you will need to park the vehicle in a garage and leave it unused until you reactivate its policy later. Of course, driving a vehicle with suspended auto insurance is illegal. If you suspend coverage, don’t drive the uninsured vehicle under any circumstance.
- Update Your Vehicle Classification
When you took your policy with an insurer, you would have told your broker the main use of your vehicle. For many people, their vehicle is classified as being used for “commuting/pleasure”. This means standard vehicle usage such as driving to work and using your car during free time. Because you won’t be driving for work in the current situation, inform your insurer and they may change the classification to “pleasure”.
You will have to inform your insurance company when the lockdown lifts and you return to work. Not doing so could lead to your insurer denying a claim if you’re involved in a collision on the way to work in the future.
During the COVID-19 lockdown, many motorists will see their car insurance policy come up for renewal. If your policy is due to end, there’s never been a better time to compare auto insurance quotes to find the most affordable premium that meets your coverage needs. For more money saving tips, please visit our COVID-19 Resource Centre.