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How is COVID-19 Impacting My Car Insurance?

April 15, 2020
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With the dramatic changes to lifestyles over the past several weeks, car owners are driving much less than usual, if at all.  If you own a vehicle and your regular driving habits have changed, you may have several questions around your auto insurance coverage. We’re here to help and address some of the questions we’re hearing from our clients:

If I’m not going to be driving my car for an extended period of time, can I cancel my auto insurance?

For many reasons, you should NOT cancel your car insurance coverage. First, in most states, automobile liability insurance is mandatory or compulsory, and if coverage is canceled, you will be held personally responsible for an accident and could be heavily fined by the state.

Next, while your vehicle is sitting in your garage, driveway, or parking facility, it could suffer damage due to fire, theft, wind, hail, vandalism, or some other type of physical damage. You will want to maintain your physical damage coverage, in full.

Finally, if you need to rearrange cars in your driveway, or need to take a ‘quick spin,’ to a grocery store very near your home, and you either cause or become a victim of an accident, and you will need your auto coverage.

Can I ‘suspend’ my coverage?

Again, like the scenarios described above, you should NOT suspend your coverage. Insurance companies may be willing to suspend coverage for extended periods of time if a vehicle is in storage and will not be driven at all. Examples of this include a ‘snowbird,’ who leaves Ohio and lives in Florida for several months, or a policyholder on military deployment.

Is there any other way I can get a discount or credit for the period I’m not driving?

We are glad to advise that, yes, several insurance carriers have responded to the change in regular driving exposure and announced that they will be applying ‘stay at home’ premium credits to auto insurance policies. The credit amounts and how they will be distributed vary by the insurance carrier, and we are providing website links to our carrier communications, below.

My child is a college student and they are home early, due to the state quarantine regulations. Will I lose my ‘student away at school’ discount?

Most policies account for children returning home and driving the summer months (May – Aug), and we are just a few months short of this timing. While we have not heard any insurance carrier taking a position on this, it is very unlikely that the insurance carriers will remove ‘student away at school’ discounts.

What if I begin using my car for deliveries (or other transport)?

If you start using your car to deliver food, merchandise or passengers (for a fee), it is unlikely that your personal auto insurance will extend to cover this exposure. This activity is deemed as ‘business,’ and it is excluded under the typical auto contract.

You will want to call us to discuss your coverage. If not written properly, you could experience a gap, or worse yet, have no coverage in the event of a claim or accident.  The proper form of coverage is likely a commercial auto insurance policy.

However, some ridesharing and delivery service companies like Uber, Uber Eats, Door Dash, GrubHub, Postmates, and Lyft provide drivers some level of insurance coverage. However, understanding the various offerings can be daunting. When coverage applies, it varies to ‘when you are in possession of goods to be delivered,’ from ‘when you are in possession of goods, pick up or deliver goods and upon return to a designated location,’ some look to the personal auto policy limit to be exhausted before responding, and some require both the driver’s and the company’s policies to participate in coverage. The amounts of liability coverage also vary, by ridesharing company, and contain deductibles.

Another option to consider is that some insurance companies like Progressive, Safeco, State Farm, Allstate, and GEICO do offer a form of ridesharing/delivery specific coverage for some of those mentioned above.

The bottom line – review your auto coverage and all your insurance options BEFORE you start driving and delivering.

How do I file a claim during the outbreak or quarantine period?

As always, we are here for our clients during these times and our entire Personal Risk team, including our Claims Advocates, may be reached by phone or email.  As well, our insurance carriers all offer 24/7 claims response and may be contacted, at any time, to file a claim or discuss questions. The toll-free phone numbers for all of our insurance carriers are located in our resource center.

“Stay At Home” Auto Premium Credits and Premium Payment Flexibility

As noted above, in response to the pandemic, our personal insurance carrier partners have recently communicated that they are extending ‘stay at home’ premium credits that will apply to auto policies for the next few months.

In addition, they are also offering options to delay premium payments (providing an extended ‘grace period’) for a specific length of time.

Click to view our Carrier COVID-19 Updates and Contact Information.

For more information, contact us here or learn more on our COVID-19 Resource Center.

 

About the Author:

Kim LucarelliKim Lucarelli, CIC
Director of Sales, Personal Client Management, Sr. Vice President
216.397.8582

 

 

Note: This communication is for informational purposes only. Although every reasonable effort is made to present current and accurate information, Oswald makes no guarantees of any kind and cannot be held liable for any outdated or incorrect information. View our communications policy.