According to the American Property Casualty Insurance Association, auto insurance companies have so far doled out about $14 billion in coronavirus-related discounts and refunds to policyholders. That large pile of cash is about to grow even bigger. Here’s why auto insurance discounts are likely here to stay.
The State Mandate
As Money notes, auto insurance rates are approved by state governments, and they’re not supposed to allow sky high prices. With some states still under lockdown, it’s unlikely insurance companies will be able to increase costs. Consumers will continue to drive less and therefore, fewer accidents will occur. You can expect state regulators to keep insurance companies from raising prices for as long as the pandemic keeps you off the roads.
The Changing Workplace
The pandemic has likely changed the American workplace for good. More people are working from home and they seem to enjoy it. According to a report by Human Resources Executive magazine, more than 50 percent of all workers now want an option to work from home. With fewer people commuting to work, insurance companies will likely face fewer claims from fewer accidents. That all translates into lower premium prices.
If there is another wave (did the first wave ever stop?) of coronavirus cases in the colder months, expect insurance companies to adjust their rates. Even when driving rates lower by a small amount, insurance companies reap the benefits. If another wave comes and lockdowns get rigid, insurers will likely be forced to keep the discounts coming.