Most of Canada is on lockdown and many businesses are temporarily closed as a preventative way to reduce the spread of the coronavirus. These are sensible measures, and they likely mean you are driving less or not at all for the next few weeks or months. As a result, there is potentially an opportunity for you to save on your auto insurance policy.
Here are a few ways you may be able to reduce your car insurance premium during the COVID-19 pandemic:
Sign Up for Usage-Based Insurance
Usage-based insurance (UBI) gives drivers the option to have their premiums determined, in part, by how often they drive, how far, and when. It stands to reason if you are working from home or are off of work for the time being, signing up for UBI may save you a few bucks each month. There are two types of UBI: pay-as-you-go and pay-how-you-drive. Talk to your insurer or broker to find out which version they offer, as both give you the opportunity to earn a discount on your monthly premium.
If You Have Two Vehicles, Take One Off of the Road
Do you have two cars? If you and your spouse or partner are not driving daily, it may be worthwhile to leave one vehicle parked in the garage and suspend your coverage for it.
But take note: if you choose to go this route you cannot under any circumstance drive the vehicle that has had its insurance coverage suspended. Furthermore, if your policy includes rental car insurance, it too will be on-hold, meaning you will need to purchase a rental car company’s coverage if you rent a vehicle
Increase Your Coverage Deductibles
A deductible is the portion of your insurance you agree to pay upfront before your insurer’s coverage kicks in if you file a claim. The higher your deductible is, the lower your monthly premium will be. Since you’re driving less, there’s less of a chance you will get into a car accident. Thus, by hiking your deductible you can make a small difference in how much your insurance provider will charge you for coverage.
Update Your Vehicle Classification
If you use your vehicle to commute to work or occasionally for business, let your broker or insurer know you’re driving less, since there could be savings you can tap by changing your vehicle classification from “commuting/pleasure” to “pleasure”. That means you are lowering the amount of annual kilometres you drive as listed on your policy. Be sure to notify your insurer in advance, though, when you do return to driving the same distances you did before the pandemic struck.
What Are Other Ways to Save on Car Insurance During the COVID-19 Pandemic?
There may be additional things you can do to reduce your auto premium during the COVID-19 lockdown. Ask your insurance provider or broker about these possibilities:
- If your car is 10 years old or older, think about removing comprehensive coverage if you have it. Comprehensive coverage pays for losses other than those covered by collision coverage such as theft, fire, or hail
- Are you taking advantage of all the discounts your insurer provides? Find out. It never hurts to ask if there are other ways you can save
- Is your auto insurance policy up for renewal? Don’t renew without exploring your options. Now’s the time to shop around for the lowest rate you can find