As the coronavirus (Covid-19) pandemic forced the economy to slow significantly, job losses and remote work led to a significant decrease of car usage across the country. By April of 2020, many auto insurance companies were offering temporary discounts to their customers, which came as a relief to people who were already struggling with a number of financial concerns. However, it appears that many of these discounts are about to expire, meaning rates will go up—or, in some cases, rise higher than pre-pandemic rates. Let’s take a look at what to expect in the coming months and how you can prepare for this economic challenge.
Temporary Relief
After Allstate announced in early April that it was offering its customers a 15 percent discount on their auto insurance coverage, California Insurance Commissioner Ricardo Lara mandated that all auto insurance providers follow suit and offer discounts for the months of March, April, May, and June. As a result, it’s estimated that California drivers collectively saved over $1 billion, with the average policyholder enjoying a break of approximately $57. While this may not sound particularly significant, consumers were particularly grateful for this savings during this economically uncertain time.
What to Expect in the Near Future
With the number of auto collisions reduced by almost 50 percent, it makes sense that these discounts would continue. However, Lara has not issued a mandate requiring insurers to extend these discounts; instead, it’s up to the individual insurance companies to assess an individual’s driving habits to determine whether such discounts should be extended. So far, most auto insurance companies have remained vague about their plans, but one consumer told the Los Angeles Times that Allstate recently billed him for the next six months in premiums, which have jumped from $171 a month before the pandemic to nearly $190. Other companies, like State Farm, are stating that they intend to continue cutting rates.
Next Steps
With no clear guidelines in place, auto insurance companies may vary in the actions they take to either continue offering discounts or to recoup some of their losses. It appears that it’s now up to you to show your insurance carrier that you are a safe driver and that you deserve these discounts. If you do find yourself in the unfortunate situation of being involved in an auto accident, make sure you contact an experienced auto accident lawyer as soon as possible so that you can obtain the best possible outcome.
To learn more about how to handle negotiations with your auto insurance company following an accident in the Murrieta or Temecula area, call the dedicated attorneys at Hales & Associates, A Professional Law Corporation at (951) 489-3320 today.