The coronavirus pandemic has made it more challenging for average Americans to pay their bills. With more than 20 million people filing for unemployment, the fact is many are forced to cut expenses. Unfortunately, one of the expenses that becomes harder to pay is car insurance.
The good news is that you can likely work with your car insurance company right now if you are unable to make the monthly payments due to a change in your income during the COVID-19 pandemic. Many car insurance companies are either obligated or willing to offer payment relief by restructuring payment plans, offering refunds on previous premium payments, and more. The following is an overview of how you can work with your car insurance company on payments during COVID-19.
Paying your car insurance company during COVID-19
Car insurance is an essential cost that we all have to take on. It is a great way to ensure you have the coverage if significant damage happens to your car, but it can become difficult to pay for during COVID-19 if you have lost your job, received a temporary layoff, or are unable to find a job due to lack of hiring.
Additionally, the simple fact is many are driving less now due to social distancing protocols that are enforced by state and federal governments. This means the risk of an accident is significantly lower, which offers leverage when working with your car insurance company about how to handle payments during COVID-19.
Explain your situation to your car insurance company
Perhaps the best way to deal with the inability to make car insurance payments due to COVID-19 is to simply talk to your car insurance company. You are likely one of many that feels challenged to come up with the money for the monthly payment, and many insurance companies are willing to work with you during these trying times. Several of the more common ways an insurance company may offer financial relief during the COVID-19 pandemic include:
- Grace periods
- No late fees
- Payment plans
- Pause your policy
- Offer premium relief
Although many car insurance companies offer financial relief programs during COIVD-19 because they are understanding of the current situation, some states also strongly encourage or have put in place temporary regulations to ensure individuals do not lose their coverage due to unemployment.
Some car insurance companies are also offering discounted premiums, which is fair considering stay-at-home orders have mandated many to drive less. If you are unable to make your monthly payments, then check with your provider about any temporary premium discounts they may offer.
Understand what coverage options you have available
All too many begin to feel overburdened when they are unable to pay for their car insurance, feeling as if they have no options in the matter. However, there are ways to work around an inability to pay for a month or several months, especially during the COVID-19 pandemic.
Understanding what options you have available is helpful when working with your car insurance company. Several options that you may have available to you include:
- Create a temporary flexible payment plan – You may be able to work out a temporary plan that includes paying lower premiums each month during the COVID-19 pandemic, especially if you are not driving as much. Ask your insurance company if they are willing to discount, delay, or cancel payments for the next month or two.
- Temporarily suspend your car insurance coverage – Although it is rarer, some car insurance companies will allow you to suspend coverage if you will not be using your vehicle during the COVID-19 pandemic.
- Reduce your coverage to only comprehensive and collision – Comprehensive and collision coverage are essential for driving, but there may be elective parts of your coverage that you do not need. Consider cutting unnecessary parts of your coverage temporarily, if possible.
- Cancel your car insurance coverage – If you do not plan to drive your vehicle anymore, then you can cancel your car insurance coverage.
Some options such as suspending your car insurance coverage and canceling your policy will likely require you to file an affidavit of non-use. Be sure to check your local and state laws to determine what needs to be done if you plan to cancel your insurance coverage.
However, you should not have to cancel your coverage if you do not want to, especially if the reason you are unable to pay is related to the COVID-19 pandemic. Most car insurance providers understand the importance of remaining flexible during these challenging economic times.
How to choose the best option when you can’t make payments
As discussed, the three primary options you will have available if you are unable to pay your car insurance company is arranging a more flexible payment plan to deal with economic struggle, suspending your insurance coverage and canceling your policy.
It is important to note that if you plan to drive, then canceling or suspending your policy is not recommended as having car insurance is required by law. If you plan to drive, then do everything within your power to work with your car insurance company and negotiate a payment plan that works for you.
Regardless of your preference, the best way to make the most informed decision is to contact your car insurance company directly and see what options are available.
The bottom line
If you feel overburdened and unable to make your car insurance payment due to the coronavirus, then you are not alone. There are options available to help you find relief financially and still keep your insurance coverage.
However, taking advantage of the insurance relief that many car insurance companies are offering requires you to work with them directly. By taking the time to let your provider know if you are unable to make payments, you can save yourself a lot of headache and will likely be able to find a solution that works for you and your car insurance company.