Coronavirus and Car Insurance: What You Need to Know

Your guide to car insurance and the coronavirus, including what you need to know about auto insurance refunds.

Kayda NormanJune 25, 2020

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In response to the coronavirus pandemic, car insurance companies are making changes to customers’ insurance premiums, payment deadlines and more.

We’ve put together this guide to help answer your questions around car insurance and COVID-19.

I’m driving less. Will my car insurance company give me a discount?

As fewer Americans are driving during the pandemic, many car insurance companies are giving customers back part of their premiums in April and May, with some insurers extending these rebates. If your insurer is offering one, you won’t need to do anything to receive your refund. We’ve put together a list of insurers offering coronavirus car insurance refunds, including how much you should expect to receive.

I can’t pay my car insurance premium. What should I do?

If you can’t pay for your insurance, be proactive and contact your insurer. Many states are requiring insurance companies to extend grace periods, usually offering a 30-day period after payment is due when you can still pay and won’t lose coverage. Some companies are also offering flexible payment plans and eliminating late fees and cancellations due to nonpayment. Keep in mind, not all relief options have been extended past May. Check with your insurer for updates.

I’m not driving as much. Should I cancel my car insurance?

This is rarely a good idea — drop coverage only as a last resort and if you aren’t driving at all. Almost all states require you to have auto insurance to legally drive, whether you do it every day or once a month. Beyond that, a lapse in coverage will result in higher car insurance rates in the future.

What changes can I make to my car insurance to save money?

One option is to drop all coverage except for the state-required minimums. Think carefully before you do this. Removing comprehensive and collision coverage will leave your car (and your wallet) exposed if you damage your car in an accident or your car gets stolen or vandalized.

If you aren’t driving your car at all, and don’t have a loan or lease on it, you can suspend coverage or drop to comprehensive-only insurance if your car is in storage. Some states will require you to file an “affidavit of non-use” with your state’s department of motor vehicles.

Before you change your policy, make sure you have a backup mode of transportation. If you rely on public transit, can you still use it during the pandemic? Do you need your car in case of an emergency or for a grocery run? If the answer is yes, you won’t be able to suspend your insurance or switch to comprehensive-only.

Other ways to save money include asking about discounts, comparing car insurance quotes with multiple insurers and increasing the deductible, which is your share of repair costs before your insurer pays the rest of a claim.

Should I consider pay-per-mile car insurance?

Another possible way to save money is by switching to pay-per-mile insurance. This option is best suited for drivers who won’t be driving a lot long-term. Some companies, like Metromile, specialize in this type of insurance, while a few large insurers, such as Nationwide, also offer a per-mile option.

Unlike traditional insurance, premiums for this type of policy depend on how many miles you drive each month. There's a base rate, which is the same each month, and then a per-mile rate, which typically has a cap, such as 250 miles per day. Using a plug-in device or a smartphone app, companies can determine how far you drive. Some programs also track other driving habits, such as speeding and hard braking.

How can I submit a car insurance claim during the outbreak?

Many companies allow you to submit a claim on a mobile app or website. Apps often allow you to upload photos or videos of any damage without the need for a claims adjuster to see the car in person.

I want to make money as a delivery driver. What car insurance do I need?

Usually, a delivery driver using a personal vehicle would need to buy a commercial auto insurance policy or rideshare insurance.

Certain states, including Alabama and Pennsylvania, have encouraged insurance companies to expand coverage for drivers delivering food or medicine during this time. As a result, some insurers automatically extended coverage to include a customer’s personal vehicle while they are delivering these essentials.

Coverage periods vary by state, with some insurers offering this extension only while an emergency order is declared in the state. Contact your insurer for more details.

NerdWallet Guide to COVID-19

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