Insurance Rates during the Covid-19 Pandemic
Relief, not Rebate
Many news outlets recently published reports stating insurance companies were offering ‘rebates’ to their clients as a way of helping with auto insurance bills during the Covid-19 pandemic. This has led many people to believe they would receive money from their insurance company due to not driving their car, which is not entirely true.
Every insurance company in Ontario is instead offering various options to help people with their auto insurance payments. Here is a list of the most common options being offered, however it is company dependant and these options may not be offered by every company. Please speak with your insurance broker to discuss available options for you.
Suspension of coverage
If you find you no longer use your vehicle due to being isolated or working from home you can suspend your coverage which would dramatically reduce your monthly costs. However, while the policy is suspended your vehicle would not be road legal – If you rely on your vehicle to get groceries for your family or for others, this option may not be good for you as you would not be able to operate your vehicle for any reason, not even in an emergency. Your vehicle would essentially be covered for Comprehensive coverage only (i.e. fire/theft). It is worth noting here that if your vehicle is leased you may not be able to suspend coverage due to the lease agreements so you may want to speak with your leasing representative to see if you can suspend coverage during this time before contacting your insurance provider.
Amend your vehicle use
If you use your vehicle to commute to work or drive long distances, this can be changed to reflect the reality of your current situation. While the savings may not be large, there could still be a potential reduction in your premium so check your policy to see what you currently have these distances set to and speak with your insurance broker to make any changes.
An insurance payment can be deferred by up to 30 days, however, this is done on a case by case basis and requires approval from your insurance providers underwriting team. It is also worth noting that a payment deferral does not mean the payment is forgiven; it would instead be collected the following month.
NSF Fee Forgiveness
If a payment is missed due to Covid-19, many insurance companies have said they would be willing to forgive an NSF fee they charge. This is again done on a case by case basis and requires underwriting approval by your insurance company.
Cancel your policy
The last option is to cancel your insurance policy altogether but this should be your very last consideration if nothing else is going to work financially for you. You may want to check any lease or finance agreements as they may not allow your vehicle to be uninsured for any length of time. It is also recommended to check with your insurance provider to see if they would charge you a cancellation fee or if they would be willing to waive this option as this may also be considered under a case by case basis.
The news is always changing
Every day seems to bring new news stories and updates to our lives and when it comes to insurance the only people to trust for the right information is your insurance broker. If you have read anything in the news that states insurance is changing, call your broker to make sure it is the right information. They can help you make an informed decision during this difficult and uncertain time.
The Insurance Bureau of Canada has written a post giving some information on the current situation with regards to what insurance companies are doing for their clients during this time however not every insurance company is the same so if you want to find out more information, call your representative first to find out more.