“There are many factors that affect the price of car insurance. Even if today there are fewer cars on the roads and fewer claims, this situation is temporary and policyholders shouldn’t count on their short-term savings to last too far into the future”, said Russell Rabichev, Marketing Director
LOS ANGELES (PRWEB) May 05, 2020
Compare-autoinsurance.org has launched a new blog post that presents the effects of coronavirus outbreak on the future car insurance payments.
For more info and free car insurance quotes, visit https://compare-autoinsurance.org/what-effects-the-current-covid-19-pandemic-will-have-on-future-car-insurance-premiums/
Stay at home restrictions imposed by authorities due to the coronavirus outbreak have caused vehicles across the US to sit in garages and in parking spots for long periods of time. The significant reduction in driving has resulted in fewer claims and higher profits for insurance providers. For this reason, most insurers are voluntarily offering relief to their customers. It is estimated that car insurance companies will be giving back a total of $10.5 billion in premiums and various benefits
Although it’s too early to know how the current crisis will affect auto premiums over the long term, many believe that the insurance rates are likely to return to pre-coronavirus levels. However, there are many factors to consider, including the following:
- How often policyholders will drive. The annual mileage is an important factor used to determine car insurance premiums. Since the crisis began, a record number of employees and self-employed workers have been working from home. Many workers and companies that have operated successfully during the pandemic with remote teams may be getting used to the work-from-home setup and extend it as a benefit. Office workers are likely to adjust down their estimated annual mileage, or even switch to a usage-based policy if they continue to work-from-home. On the other hand, service workers are likely to return to their normal habits and see their rates return to normal in a few months.
- Claim frequency. In this time of crisis, vehicle accidents and claims are down significantly. This is normal because drivers are on the road for shorter periods and are less exposed to accident risks. This situation is not going to last for long. Once shelter-in-place policies subside, road traffic, car insurance claim rates, and car insurance premiums should return to normal.
- Policyholder difficulties. To date, more than 30 million Americans have filed for unemployment insurance benefits during the COVID-19 pandemic. Some industries will recover quickly after the pandemic is over, while other industries will suffer for years to come. Less overall economic activity means that many drivers will not be able to pay their auto loans, leases, or car insurance. Insurance providers are likely to increase premiums to offset their losses caused by unemployed policyholders who can't afford insurance.
- Distracted driving. The legislation and enforcement against the use of handheld devices while driving is another factor used to determine premiums. According to III, mobile phone use is a factor in 14% of distraction-related fatal crashes. However, many believe that the percentage might be higher.
- Natural disasters frequency. Car insurance got more expensive due to devastating natural events such as hurricanes, tornadoes, wildfires, and floods. If insurance providers will experience more comprehensive claims and losses, then it's likely to increase the premiums for clients who live in states that are affected by extreme weather events.
- The profitability of the insurer’s portfolio. The current low-interest-rate environment means carriers will have reduced investment income for the foreseeable future. Because of this, providers are likely to increase the premiums or to eliminate coronavirus-related relief to remain profitable.
For additional info, money-saving tips and free car insurance quotes, visit https://compare-autoinsurance.org/
Compare-autoinsurance.org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc.