A variety of factors caused by the pandemic could lead to a 6.2% decrease in written personal auto insurance premiums and a 3.5% decrease in commercial car premiums for all of 2020. Insurers say that car incidents and lawsuits drastically decreased since employees and the unemployed stayed at home due to coronavirus mandates.
Many agencies have issued their clients with auto insurance reimbursement or premium bonuses. Some auto insurance companies have taken a wait-and-see approach to decide whether driving is going to be comparable to pre-pandemic levels.
COVID-19's Impact on Policyholders
As of now, there are 22 million Americans that applied for unemployment insurance incentives ever since the pandemic broke out. This number is likely to increase as new applicants get through crowded state websites and call centers to successfully submit applications.
If insurer profits drop because unemployed policyholders cannot afford auto insurance, carriers may have to cover losses by increasing premiums. Auto insurers' actions can largely depend on whether and for what length of time states issue leniency regulations for insurers, such as holds on non-renewals for non-payment.
How Insurers Are Helping Out
Auto insurers have placed other steps to support consumers who have lost their jobs or been furloughed and are in financial difficulties because of the pandemic. Several put a temporary hold on canceling non-payment plans and waived fines for late payments during the spring.
As a result of the pandemic, the U.S. auto insurance market has diminished. Still, carriers giving back money and the delay in canceling non-payment plans have also possibly helped stabilize these changes and help them recover. Premium cutbacks mostly ended in May and June. However, some businesses are still assisting with consumers' requests, such as flexible payment arrangements on a case-by-case basis.
The decline in driving has led to fewer claims and higher earnings for auto insurers. That's why carriers volunteer to provide their customers with relief.
At Brad Spurgeon Insurance Agency Inc., we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (409) 945-4746 or Click Here to request a free quote.