Each year, drivers might expect some changes in auto insurance, and 2020 is no different. Whether rates increase or decrease, or components of your plan’s coverage change, you can count on industry shifts. It is important to stay up-to-date to make sure you are getting the perfect combination of the best rates and comprehensive coverage.
Here are four ways auto insurance has changed in 2020:
1. Rates Were Set to Rise and Fall During the First Half of 2020:
In February 2020, Business Insider reported that the industry predicted that 7.7 million Americans renewing their policies during the first half of the year would see slight reductions in car insurance rates. During the same period, 5.6 million people would experience an increase in insurance rates. Since rates vary from state-to-state, this seeming discrepancy makes sense. Car insurance rates frequently change because insurance companies must constantly weigh the changing costs of medical care and car repair against premiums collected and payouts over the previous year.
2. COVID-19 Effects on Auto Insurance Rates and Coverage
During the past 50 years, the U.S. personal auto insurance market has not correlated to the broader U.S. economy, reports McKinsey & Company. During the past 20 years—even during the Great Recession—the auto market has remained unaffected by the marketplace. However, the coronavirus pandemic has caused—and may cause more—structural changes in the market.
One example of the possible shifts involves the need for social distancing during the pandemic. To avoid spreading or encountering infection, more people might start driving instead of taking public transportation or ride-sharing to and from work. In itself, that would not present a huge problem since many employees are working from home. However, with fewer people on the road, drivers may take more risks and drive faster, resulting in more accidents. The latter half of 2020 will show the pandemic’s effects on the auto insurance market and the rate changes drivers can expect.
3. Michigan Drivers Can Expect a Rate Cut as of July 1st
According to Click on Detroit, Michigan drivers have long paid the highest insurance rates in the country. Thanks to bipartisan approval for auto insurance reform from Michigan lawmakers, drivers can choose their coverage level, starting the first week of July. Premiums for drivers’ rates will depend on the coverage they select and factors such as their driving record and insurance claims history.
4. Insurer Announces Changes in Coverage for New and Existing Clients
Savvy customers can save up to $707 on their annual premium just by optimizing their plan or moving to a better company. If you are ready to save big bucks then you better learn how to switch car insurance online.
- Car Protection. Choose from comprehensive and collision coverage.
- Financial Protection. If you are at fault for an accident, liability insurance is vital to keep your finances secure
- Passenger Protection. USAA offers personal injury protection or uninsured and underinsured protection
- Accident Forgiveness. As long as you and your family members on your insurance policy have not had any at-fault accidents over five years time, USAA will forgive your accidents and reassess your rates
Review Your Auto Insurance Policy
If any of these changes look promising to you, now is the time to make your move. With the generally fluctuating rates, as well as rates affected by COVID-19, the short-term opportunity for savings in Michigan and the ongoing benefits of investing in car insurance with a trust provider, you have plenty of options to stay safe and save money.