You Can Pay Almost Nothing for Car Insurance Right Now

If you haven’t done a thing about your auto insurance during the COVID-19 pandemic, then you’re probably missing out on hundreds of dollars in savings. With fewer vehicles on the roads—and fewer accidents—insurance companies aren’t paying out as much. They should be passing those savings on to you.

If you’re one of the nearly 80 percent of American millennials who own a vehicle, here’s what you need to know to save the maximum amount of money on auto insurance.

Insurance companies across North America are offering rebates or credits on April and May insurance premiums, waiving late fees, and granting payment deferrals. What you can get depends on your insurer, your particular situation, and where you live. But you won’t know what’s available until you get on the phone and find out.

If you’re still driving, but way less than before, it’s time to modify your insurance coverage, according to Justin Thouin, founder and CEO of LowestRates.ca, a Canadian insurance comparison site. For example, if you’re working from home instead of commuting and you only use your car once a week to get groceries, then you should be paying way less immediately.

According to a recent report by LowestRates.ca, drivers in Toronto can save an average of 15 percent while Montreal drivers can reduce their insurance by 36 percent.

Even essential workers who are driving the same amount as before are eligible for discounts—because of the overall reduction of vehicles on the road.

There are other ways to pare your coverage back, according to Michelle Megna, the editorial director of CarInsurance.com, a U.S. consumer guide to auto insurance. “If you have full coverage that includes comprehensive and collision, those come with a deductible and you can raise your deductible and that will lower your rates for extra savings,” she said.

If money is really tight, and you’re not driving at all, it may be tempting to ditch your auto insurance altogether, but experts warn against it.

“When things do stabilize and you go get insurance on the car, you will probably pay a much higher rate because the insurance companies do not like a lapse in coverage. They consider that high risk. So when you get your car back on the road, it will bite you in the wallet,” said Megna.

Instead, consider switching to bare-bones coverage, like fire and theft. Drivers in the U.S. who pause driving altogether can opt for the minimal coverage allowed in their state.

Thouin’s research shows the average insurance savings in Toronto is 96 percent and 90 percent in Montreal if you have stopped driving altogether.

He says the only situation where it makes sense to stop your insurance coverage is if you sell your car and no longer have a vehicle to insure.

Contact your provider to get them deferred. Megna says this is a way to skip the bill, but it isn’t a “free ride,” meaning you’ll still owe that money later but you won’t be penalized for it, as long as you make arrangements and document it.

Everyone is entitled to some kind of financial break, says Megna. “If you’re not, then you should shame your insurance company on social media because there’s really no reason why all companies should not be offering some kind of economic relief,” she said.

Or you can consider switching to another provider, and use that as leverage with your current insurer. Thouin says it’s always worth finding out about cheaper options—but cautions it’s a moving target.

“The difference between the company offering the lowest price and the highest can literally be thousands of dollars per year. And the company offering the best deal right now might not be next year because insurance companies change their prices almost monthly,” said Thouin.

You need to find out what penalty, if any, you face to switch to another provider, and from there you can figure out if it’s worth it. Generally, you get the most discounts and loyalty rewards for staying with an insurance company for a long time but this may be less of an issue for younger, newer drivers.

“It takes five minutes online and even if you find that your insurance company is the best one, at least you have peace of mind that you’re not wasting money,” said Thouin.

Megna suggests waiting until you get the credit or refund due to you by your current provider before moving on. She recommends comparison shopping at least twice a year, and every time you have a major life change, pandemic or not.

Megna says it’s a good time to research what other savings are available to you.

“Your car insurance provider isn’t going to interview you for every discount that you qualify for so sometimes you’re missing out just because you don’t do that due diligence. If you’re in grad school, there are good student discounts. There are affiliation discounts like your alma mater if you recently graduated,” she said.

There are things you can do to save money too, such as take online defensive driving courses. “For a Geico policy in New York and Texas you can get up to 10 percent. In California it’s 5 percent. So that’s one way to trim costs without leaving your house,” said Megna.

Another source of potential savings is bundling: using the same company for home insurance (apartment insurance if you’re a renter) and auto. It’s situation-specific, depending on your circumstances and what the company is offering.

There’s no time like the present to start insurance coverage, especially if you’re not driving much, says Magna. And if roads stay less busy, the coming months will present a unique opportunity.

“Rates are established using multiple years’ data. That means the price you pay adjusts gradually,” said Megna. “If there is a sustained decrease in the number and cost of insurance claims, because people are driving so much less for such a long time overall, that could mean rates decrease in the near future.”

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