(Newswire.net — June 16, 2020) —
COVID-19 has affected all of us in several ways all around the world. This pandemic has stopped travel, restricted restaurants, made for more interactions through video chat, and has a lot of people unemployed, or working from home!
As many of us are forced to stay home, we’re not driving to work and other places. This has had a severe impact on the auto insurance industry.
We’re going to go over the ways the COVID-19 pandemic is affecting car insurance companies.
Fewer People Driving
The Insurance Institute for Highway Safety reported that there are fewer car accidents in rural areas than urban areas in the last couple of years. Urban locations are more densely populated, which can be translated into more cars in those areas. This means that if there are more cars, it’s likely there are more accidents.
We all know that auto insurance covers us and assists us when we’re “trying to rewind the clock and discover what happened in an accident in which you recently sustained serious injuries,” state those at diamondlaw.ca.
However, with most of us at home, and even large cities being shut down, there aren’t as many cars on the road, which means fewer accidents based on the research mentioned above. For us, this is reassuring because no one wants themselves or others in car accidents that result in injuries or death.
For insurance companies, this means that they’ll need to lower their rates because right now, you’re a lot less likely to have a car accident. Even if you have a bad driving history, or are a new driver, things are different from what they were.
A Decrease in Driving Miles
People all over aren’t using their cars as much because there isn’t a need to. Maybe you’ll go to the store once a week, but other than that, there’s nowhere else to go, as many of us are out of work or working from home.
This remarkably decreases the miles we’re putting on our cars. There has been pressure for auto insurance companies to make plans that are based on the mileage every month, rather than a fixed rate. It will be great for the people who are driving, but for the auto insurance companies, they’ll be making a lot less than usual.
Financial Crisis
Besides our health, the next most significant thing that COVID-19 is affecting is our financial stability. Unemployment in the United States has skyrocketed to 14.7% as of early May 2020. People have just started to receive their stimulus checks, but it still won’t be enough for all bills.
Paying in full for auto insurance when we’re not using our cars will be tough for a lot of people out of work right now. A lot of the auto insurances have plans at the moment that allow you to still be covered, even if you can’t afford it.
The Bottom Line
COVID-19 has made a considerable impact on all of our lives, and it’s true that more than ever, we’re driving a lot less. This creates an impact on car insurance companies.
There should be lower rates because we’re less likely to get into an accident now, we’re driving fewer miles, and people can’t afford all of their bills.