COVID-19 has had an impact on almost every aspect of human life. It has caused unexpected financial strain. Many consumers are concerned about how they will pay for recurring bills such as insurance payments, despite the stressors of job cuts and layoffs.
Companies are responding to the government mandates in a variety of ways, including extended grace periods and relief from insurance premiums.
Many mandates issued early in the pandemic by state insurance commissioners have since expired. However, many insurance agencies still offer extended grace periods, waive late fees, and extend coverage to delivery drivers. It is still a rapidly changing situation. Talking to a representative to learn more about your particular situation can help you understand how your insurance company responds to the crisis. For more information on guidelines in your region, visit the website of your state’s insurance commissioner.
Even though the pandemic has been ongoing for more than a year now, COVID-19 could still have an impact on your auto and home insurance rights.
How COVID-19 impacts homeowners insurance
Some home insurance providers offer additional coverage because more people are working remotely in accordance with CDC guidelines. Ray Farmer, president of The National Association of Insurance Commissioners and director of South Carolina Department of Insurance recommends that you speak with your agent to determine if your coverage is adequate and what your options are. Are you concerned about your mortgage payment? What lenders are doing for.
Insurance companies are quickly adapting to the changing environment.
Farmer states that “many states have taken steps in encouraging insurance companies to relax due dates, extend grace periods and waive late fees, waive penalties, freeze cancellations due to non-payment, and allow premium payments plans.”
These changes are also applicable to claim handlers and adjusters, who may use technology to verify claims. In the absence of an adjuster in person, customers may be required to show video or photographic proof of loss.
Farmer states, “In today’s innovative landscape much of the industry can handle claims processing via online tools that allow prompt service and payment to consumers.”
Mortgage rates have started to rise after reaching historic lows in 2020. This combination of rising mortgage rates and low inventory has created an extremely competitive realty market.
Buyers who are interested in purchasing a home will need to be aware of some nuances. They may still have to sign closing papers at a distance or work with lenders by telephone or online.
Farmer states that some insurance companies might use videoconference tools to conduct inspections.
Contact your agent if you plan to continue to shelter in place. If you work from home, talk to your insurance agent to make sure your homeowners policy covers you.
Farmer states that it is crucial for consumers to have adequate coverage for business, property and liability expenses. The standard homeowners policy covers business property, but the coverage limit is very low. Farmer states that it may be necessary to add a home business endorsement, or increase the limits.
You may also be eligible for supplemental coverage that you don’t need.
Farmer says that if a consumer is currently renting out a property, it’s worth speaking with their insurance company to discuss the possibility of removing certain coverages. Farmer says that while it is important to insure the property against loss such as fire, wind, hail and other natural disasters, a supplemental policy covering home-sharing may not be necessary if the property does not get rented.
How COVID-19 impacts car insurance
Your auto insurance rates will not be lower just because you are driving less, or not at all.
Scott Holeman is the media relations director at the Insurance Information Institute. “While some automobile owners may have been driving less during the COVID-19 crises, it’s too early to consider that to be an important rating factor.” “Auto insurance rates are determined using multiple years of data which leads to gradual premium increases. Drivers could see a decrease in the frequency of auto claims, which could lead to rate changes.
What to do if your premiums are not affordable
Reach out to your agent if you have any difficulties paying your premiums. Your insurance agency might be able extend your grace period to give you more time to pay. There may be discounts or other changes you can make to your policy that could reduce your premium.
The company released a statement saying that they encourage customers with financial difficulties to contact their State Farm agent. State Farm agents work one-on-one with customers to provide payment options. Every customer is different. Talking to their agent can help you discuss options like payment plans or discounts.
You can discuss whether you would like to reduce certain coverage elements based on your needs, or add more coverage. You may need additional insurance if your car is used to deliver cash or make deliveries.
How to file a claim
For the most current information and deadlines for filing a claim, check with your insurance company.
Many companies continue to make adjustments to reduce in-person contact. Agents are now able to offer virtual claim handling, and virtual and drive-thru inspections when necessary.
Don’t try to cancel your auto insurance
Insurance experts recommend that you do not cancel your coverage if you drive less often or at all. Accidents can occur even when your vehicle is parked.
All 50 states have financial liability laws that require everyone who owns a car to be financially responsible.
You could face jail time, fines, or suspension of your license if you are caught driving with no car insurance. You could also face out-of-pocket expenses if you cause an incident without insurance.
What do car insurance companies do to help?
Some insurers offer rebates to help reduce the number of drivers and the incidence of accidents.
Many car insurance companies offer free delivery coverage to anyone who has taken up delivery driving during the pandemic. You should check with your agent to confirm this coverage. Some companies have started to withdraw these coverages and you might need to pay.
The bottom line
You should take a hard look at your insurance coverage to ensure that you are adequately insured and are not paying for coverage you don’t need. Talk to your agent if you think you might have trouble paying your auto or home insurance premiums.
Sign up for email alerts from your insurance company to stay informed about the latest industry news. Also, check frequently with industry organizations and trusted news sources, such as NAIC’s Coronavirus Resources Center.