SWITCH Insurance and its customers have been keeping an eye out for new of Insurance Providers’ relief measures to help cope with the financial impact of COVID-19. While the general situation people find themselves in is grave indeed, there is some good news. In recent weeks, several insurance providers have announced some of the relief measures they have undertaken to help insurance customers during these challenging times. Of particular interest is the fact that some automobile insurance providers have decided to make drivers’ lives a great deal easier.
The Insurance Bureau of Canada (IBC) had earlier issued a statement that its member companies are now offering reductions in auto insurance premiums for consumers whose driving habits have been altered significantly due to the COVID-19 pandemic. In addition, amidst a growing volume of requests to defer premiums for numerous customers and businesses, insurance companies are providing a variety of options for their clients to be able to maintain their existing insurance coverage without breaking the bank.
It has been noted that from very early on in the crisis, automobile insurance providers came to the realization the driving habits of Canadians were being impacted. Automobile usage changed almost overnight, and in some cases very dramatically. Vehicles that people had depended on for daily commutes to and from work; for nights out on the town; or for inter-city trips for sporting events were remaining parked in driveways or parking garages. The risk profile was different than what it was when those premiums had been set either a month or 11 months ago, depending on the policy. What IBC has done is to pull all that information together and provide guidance and direction for what new premiums will look like in the current reality.
The possibility pf premium reductions over the next few months could translate to incredible savings for Automobile Insurance customers. People whose driving habits have changed significantly, as well as for those who are facing financial hardship as a result of the pandemic, should contact their insurance representative to find out if they are eligible for reduced premiums. It is worth noting that individual savings will vary depending upon individual driving habits and assessed risk levels.
For the next few months at least, IBC member companies will be able to assess individual Automobile Insurance policy holders and determine their eligibility for reduced premiums. As always, we at SWITCH Insurance will work with our clients to find out the best available options. That is why we are pleased to say that reduced premiums are not the only avenue of savings currently available to auto insurance policy holders.
In addition to adjusting premiums for drivers, IBC member companies have also committed to several additional options that could translate to increased financial stability for insurance customers. These options include a number of potentially expense-reducing possibilities:
- Offering flexible payment options for consumers who find themselves in a vulnerable position, or who may be facing financial hardship owing to the COVID-19 pandemic. Such offerings are highly customisable, and should be discussed directly with your insurance representative. The options available to you will depend upon your own unique circumstances.
- Waiving non-sufficient funds (NSF) fees that insurers would have charged if consumers have insufficient funds to cover their premiums. With some businesses and individuals seeing an end to regular income, many have come to rely on grants and other programs to prop up their financial situations. Many of these programs have application periods, and a large percentage of Canadians were simply not prepared financially for the sudden loss of revenue. By waiving NSF fees, insurance providers are giving customers one less thing to worry about. It is important to note that insurance customers would of course remain responsible for any fees their bank may charge them for dealing with NSF transactions. Be sure to contact your bank for any questions around financial institution-specific fees.
- For customers temporarily using their vehicle or home differently as a result of the pandemic, this different usage will not affect insurance holder’s premium or their ability to make a claim. When drivers and homeowners initially purchased insurance policies, they could not have predicted that they would one day be working from home and providing home-schooling for their children, with daily commutes a thing of the past (and hopefully the not-too-distant future). Recognizing that these necessities are not a direct attempt to contravene existing insurance policy usage requirements, automobile and personal insurance providers are making allowances for these changes in usage. As such, existing insurance premiums will not be affected by different usage stemming from COVID-19, nor will the ability to make an insurance claim on these existing policies.
Why is the recent statement from IBC so important? Insurers have generally dealt with premium relief for customers on a case-by-case basis as opposed to adopting a standard policy. While it is true that a variety of individual insurance companies have offered relief measures such as flexible payment options, the waiving NSF fees, and rebates on auto premiums, among others, this has not been a unified practice. Some insurance companies have even gone above and beyond just serving their customers and have made charitable donations to their local communities affected by the COVID-19 pandemic.
While some provinces seem to be on the road to re-opening certain types of businesses and slowly removing social restrictions, it promises to be a phased approach that could take a great deal of time. Additionally, any setbacks in the form of resurgence of COVID-19 outbreaks could send things back to step 1. The people at SWITCH Insurance have heard from many of our clients and understand that uncertainty and financial tensions are still a constant concern. In light of this, the announcement of IBC to have its member companies offer reduced or deferred automobile insurance premiums comes at an opportune time for most Canadians. Many Canadians are not driving as much as they were – or even driving at all – and continue to face extraordinary challenges in dealing with the COVID-19 pandemic. These measures are a clear demonstration of the Insurance Industry’s willingness to provide their customers some much-needed assistance.
Simply put, auto insurance holders are driving a great deal less under the shadow of the current pandemic. The Insurance Bureau of Canada recognizes that this sudden change in driving behaviour has been accompanied by a growing financial instability for many Canadians who find themselves working from home, working a great deal less, unable to connect with friends or family, or unable to work and wondering how to get through the next few months. This announcement that member Insurance Companies will offer reduced automobile insurance premiums demonstrates a strong support of Canadian insurance customers during troubling times.