Car Insurance and Coronavirus: What You Need to Know

Illustration of man on bike

Between sheltering in place and a tanking economy, millions of us are now stuck at home, often with a reduced or lost income. If your car is mostly gathering dust, you may be tempted to cancel your car insurance.

After all, if you’ve gone from driving a few hours every day to just a few minutes a week, it can be tempting to see that insurance premium as money needed for other essentials, like groceries.

Any lawyer, however, will advise you to keep your car insurance no matter what.

Here’s why:

  • Insurance coverage protects you in the event of a lawsuit. If you cause an accident, your insurance coverage can defend the claim. If a lawsuit is filed against you, you won’t have to hire (or pay for) your own attorney. Instead, the insurance company will have one of their lawyers defend the policy.
  • It’s the law. Getting ticketed for no insurance means court costs and a fine, not to mention you’ll have to go to court. If you miss the court appearance, you will face a warrant for your arrest. You may have the additional cost of needing to hire an attorney to help you sort it all out. Whatever the case, a single ticket for no proof of insurance can easily cost you more than a monthly premium.
  • No insurance now means higher premiums later. Once you’ve become uninsured, insurance companies will view you as higher risk. When the time comes for you to get insurance again, your premiums will go up, typically by 7% to 12%.
  • A poor economy means you are more likely to be hit by an uninsured driver. By law, even state minimum, liability-only policies include uninsured motorist coverage, which will cover your injuries if they are caused by an uninsured driver. However, if you’re uninsuredand involved in an accident with another uninsured driver, there is no policy out there to cover your medical bills.
  • Uninsured motorist coverage could include pedestrian coverage. Uninsured motorist coverage also protects you and your family as pedestrians, if you are injured by an uninsured motorist.
  • Comprehensive car insurance covers more than just motor vehicle accidents. Unfortunately storm damage and theft aren’t going on lockdown for the pandemic. Comprehensive (“full”) coverage means you still have protection for property damage unrelated to an accident.

Instead of canceling your car insurance, consider investigating the following for additional savings:

  • See if your policy is offering any discounts during the shutdown. Many companies have offered them automatically, but others are only giving it when asked. Pick up the phone or go online to see if your insurance company is willing to help.
  • Ask to have your premiums lowered. You may need to show that you really are sheltering in place, or give odometer readings. If your agent won’t at least look for a way to make your car insurance more affordable, shop around for a new policy.
  • Get rid of non-essential coverage. Rental reimbursement, travel coverage, and roadside assistance are policy extras that you can drop if you aren’t on the road very much.

Remember—state minimum, “liability-only” coverage should be your last resort. You should never drive uninsured.

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