If you've been driving less lately, you're not alone — even with historically low gas prices, business closures and shelter-in-place orders across the country mean that the roads are less crowded than ever. For some drivers, this can (or should) translate into a decrease in insurance rates. What can you do to reduce the cost of your auto insurance during a pandemic? And what types of coverage should you continue to maintain?
Check Out Pay-Per-Mile Policies
Although just about all insurance companies set their rates based on drivers' mileage (which is why you have to indicate whether you drive each vehicle for "business" or "pleasure"), some companies offer pay-per-mile policies that charge low-mileage consumers far less than those who drive more frequently. The more you're on the road, the greater your risk of an accident, so those who drive only a few miles per week may be able to significantly reduce their coverage costs by switching to one of these policies.
In some cases, you may need only to verify the starting and ending readings on your odometer at the end of each quarter. Other insurance companies will send a small tracker to be placed in your vehicle. This tracker will count the miles driven and send this data straight to your insurance company, where rate changes can be made more frequently than they might otherwise be.
Look at Your Deductibles
If the coronavirus pandemic has impacted your income, you may want to consider raising your deductible. A higher deductible generally means a lower monthly payment, which can improve your cash flow over the next few months. And if you're driving less frequently than before, you're statistically less likely to be involved in an accident.
However, it's important to avoid raising your deductible to an amount you can't easily afford. If you can't pay your deductible, you may not be able to afford to get your vehicle fixed. And if you total your vehicle, having a $1,000 or $2,000 deductible or higher can mean that your payout isn't enough to afford a comparable replacement. If you're still making payments on your vehicle, your lender may have restrictions on how much you can increase your deductible before you're considered in violation of your contract.
But if you're not subject to any restrictions on your deductible, it can be worthwhile to run some quotes to determine how much your monthly bill will go down by each $500 your deductible increases.
For more information, reach out to an auto insurance provider.
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