HOUSTON (CW39) -Many of us are driving less as there are lots of people are working from home and people who have been laid off too. Less driving typically means savings on insurance, but unfortunately, that is not what we are seeing.
We spoke to Kacie Saxer-Taulbee, an insurance expert with Insurify to learn more.
“Outside of lowering the price of gas, it really hasn’t saved Texas drivers or any American drivers as much as you might expect. Insurify’s analysis found that 57% of insurers responded with some type of payment relief in the spring after the early onset. However, most of those payment relief measures, credits or refunds or discounts did not continue past May,” explained Saxer-Taulbee.
More not so great news for drivers, Saxer-Taulbee said unless insurers respond by lowering rates long term, Texas drivers can expect their rates to go up by over 6% in 2021.
She explained rates have been going up over the past several years and that a 6% jump, while a little higher than usual, its still fairly typical.
“Rates have been going up year over year for a while now. This is kind of the pattern continuing like we would have expected in early 2020. Which in of itself is fairly surprising since you’d imagine that drivers are spending less time on the road and filing fewer claims. You would expect that trend to kind of halt or reverse but it’s not that we can tell at the moment,” said Saxer-Taulbee.
There is no question this pandemic is impacting many of us financially in some way or another, so what if you are not driving much and you need to save the money? Can you just cancel your policy? Saxer-Taulbee explains it is probably not worth it.
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“Insurify did an analysis if you kind of consider the current state of affairs, many drivers are spending more time at home and are facing more financial hardship than before, so it may seem logical to cancel their car insurance coverage as a way to save money if they are just not really using it. However, we found that for even a two month lapse in insurance, Texas drivers can expect to pay $395 in hidden fees,” said Saxer-Taulbee.
The hidden fees are things like DMV reinstatement fees and lost prior insurance discounts with insurance companies. So even though it may seem tempting to cancel your coverage, really, that might cost you more in the long term.
A good alternative, especially if you have a second car you are not using right now, is to put it in storage. Then you will be able to lower your premium with storage insurance and you do not have a gap on your insurance history. Storage insurance is about 80% off your usual premium.
Another way to save on car insurance costs during the pandemic is by checking into a mileage based coverage option.
“If you’re a driver who is just driving a lot less, maybe you’re working from home, maybe you’ve been laid off, you could switch to a mileage based option. These are companies who are going to ask you how far you are driving or even use a telematics based device to see how far you are driving and they will bill you in accordance with the amount you are driving, so that can actually save you a decent amount of money in the pandemic,” said Saxer-Taulbee.
To learn more about the report Insurify did on trends, coverage and cost of car insurance, click here.