What to do if I lost my job due to COVID-19 and can’t afford my car insurance payments?

As we enter our fourth week of “sheltering in place” we are facing an unprecedented layoff of our workforce in Washington and around the country. While the first government stimulus package is due to arrive by mid-April, it may end up being insufficient to cover our actual monthly bills.

If you have been laid off you are probably wondering “well, I’m not driving much right now, is there any way to reduce the cost of or not pay for my car insurance right now?”

As it stands currently, the Washington State Insurance Commissioner has issued an order to all insurance carriers saying that they are not allow to cancel a policy for non-payment until May 9th. While this is helpful now and may be extended as this outbreak continues, it is important to understand that just because your required payments may be delayed, does not mean they will be forgiven. It simply means that you are pushing your payment date out so that once you start paying again, you will be paying more to catch yourself up. So ideally, you want to pay as much as you can now to avoid having to pay it later.

Are there ways to reduce my insurance costs temporarily? Yes! Here are a few options that we use to help clients save money during this crazy time-

  • Double checking discounts– Each insurance carrier has a slightly different menu of discounts that they offer. While we normally catch all of them when we start a policy, you may have changes occur in your life that adjust the discounts that you are eligible for. Similarly, insurance carriers may add new discounts over time, so it’s good to check with us if you haven’t had a review in a while.
  • Trying a Telematics Device – Many of our insurance carriers now offer these programs, several offer a discount for just trying them.  You know best if this is a good idea to try – if you rarely get pulled over and would consider yourself a very cautious, conscientious driver, it could really save you moneyThe majority of people who use them get some discount. It really just depends on your driving habits, this is a really great way for people to pay based on how they drive.  The programs vary company to company to company so best to call us and see how it would benefit you.
  • Pay by Mile program- If you aren’t driving much now, Pay By Mile programs can save you some money in the short term. Be aware however, that once you start commuting again this change can actually make your rate higher than it was to begin with. For that reason we normally recommend this only if your average annual mileage per car is less than 6000 – under normal circumstances.
  • Having us shop insurance with other carriers- One of the advantages of working with an independent agent is that we do have access to many different insurance companies’ products. While switching companies can sometimes save you money, we’ve found that it usually saves you less than $20/month. Switching often further dilutes your benefit because insurance companies often rate based on how long you’ve stayed with your prior carrier (the longer the better). Again, frequently switching can have a negative impact on the rates you are paying.
  • Adjusting your deductibles – Changing Coverages –  Raising your deductibles is a great way to reduce some cost because it only affects your potential expense by a few hundred dollars if you get into an accident.  We don’t recommend lowering or removing other coverages, however, tough times can call for drastic measures. If you feel you are in this situation please just call us.  

Should I cancel my Auto Insurance altogether?  This is definitely the last resort and should be avoided if at all possible. Not only is it illegal to drive without insurance ($550 ticket last I checked), it is putting yourself and your assets at a huge risk if you were to get into an accident. Not only that but when you go to get insurance again, you will find that Insurance companies will now charge you significantly more now that you’ve had a lapse in coverage.

I hope this has proved a helpful guide for you to understand your savings options during these tough times. When you are considering your options please remember that we are likely to be your best ally to help customize your policy to fit your current needs without putting you at unnecessary risk.

Give us a call. We are here to help!

Your Team at PNW Insurance Group


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