Should I Update My Car Insurance Policy Right Now?

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A woman shopping for car insurance online
Image Credit: Dreamstime

Whether you’re working from home, laid off or postponing travel plans during the coronavirus pandemic, you may not be driving your car as often or as far as usual.

In this article, we’ll look at three ways to save on your car insurance until things begin returning to normal. 

3 Ways to Save on Auto Insurance Right Now

If you find you aren’t driving as much as usual for an extended period of time, there’s no need to pay as much as usual for car insurance.

“The number of accidents occurring, claims being filed and money having to be paid out for medical problems or physical damage to vehicles or property is like nothing right now,” says money expert Clark Howard. “So auto insurers are just collecting all that money and paying out essentially nothing.”

Some companies like Allstate, GEICO, Travelers and American Family Mutual Insurance Co. are offering coronavirus refunds or credit in order to compensate current customers. If you aren’t receiving any compensation from your auto insurer, there are still ways to cut the cost and make up for the miles that you aren’t currently driving.

To make sure you’re paying a fair price for how much you are using your car right now, consider these three options.

1. Update Your Mileage

Your auto insurer most likely asked about how much you drive on average and factored that answer into the total price of your monthly insurance. In order to avoid being charged for miles you aren’t driving right now, take the time to update your mileage.

“It is really a fantastic idea to call your auto insurer, or easier, go online and sign in to your account and reduce the miles listed for your vehicles,” recommends Clark Howard.

If you’re happy with your car insurance and want to stay with the same provider, this may be the best option for you. You’ll likely be able to save some cash based on the miles you aren’t driving, and when things return to normal, it’ll be easy to return to your original policy. 

To get started, call your auto insurer or log into your online account through your insurance provider and look for the option to update your mileage.

2. Shop Around and Compare Rates

If you’re a little more flexible with your auto insurance, now is a great time to shop around and ask for multiple rate quotes. Once you’ve found the best, most affordable plan, make the switch! 

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Anytime you’re hoping to save money on car insurance, comparison shopping is a great place to start. Try to get at least three quotes before deciding to switch. 

When you’re gathering quotes, be sure to have your current policy in front of you. This will help you ensure that you’re getting comparable coverage from different providers. 

If you need help getting started, consider working with an insurance broker. It’s their job to help you determine where you’ll get the best insurance coverage for the lowest price. That means you’ll spend less on insurance and work less on finding the best quote. 

3. Move to a Pay-Per-Mile Insurance Plan

Last, consider moving to an insurance plan that allows you to pay per mile. 

“Going to one of the small number of insurers that you pay per mile for auto insurance would be a really great idea now,” says Clark.

If you’re driving less than 10,000 miles each year, this type of insurance would be a great fit for you. You’ll find full coverage plans and save money the fewer miles you drive

Typically, you’ll have to plug a dongle into your vehicle’s port which will record your daily mileage. Some pay-per-mile insurance companies might ask you to download an app on your phone to track your driving. 

Keep in mind that these insurers aren’t usually tracking how you drive, the focus is on how much you drive.

Final Thoughts

Overall, it’s important to keep in mind that these circumstances won’t last forever and, eventually, we will be returning to normal. Still, if you can save money on your car insurance in the meantime, the extra cash may come in handy later. 

“This is a short-term huge windfall for auto insurers and a short-term wasted amount of money for you and me essentially paying for full auto insurance coverage,” says Clark Howard. “But then just a couple months away, we’re going to be back to driving a fair number of miles again.”

While you’re updating your mileage, comparing rates or shopping for a pay-per-mile insurance plan, keep an open mind and know that you may be able to lock in savings that last far beyond the coronavirus. 

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