auto insurance

NBC 5 Responds: How to Lower Car Insurance Costs During the Pandemic

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During the pandemic, many insurance companies announced discounts or rate decreases because many drivers were staying off the roads and working from home. But consumer advocates say customers may be able to save more - especially as the pandemic continues to impact driver behavior.

According to data from TxDOT, the number of crashes in Texas fell by nearly 24% between March and November of 2020 compared to the same period last year.

With fewer accidents on the road, Bob Hunter, a former Texas Insurance Commissioner now with the Consumer Federation of America, says customers should be entitled to even more savings.

“There’s a drop in risk for everybody,” said Hunter. “Most companies are now basically making a killing.”

Hunter said customers can call their insurance companies and ask about the commuting surcharge.

“If you're not commuting, you should tell your insurance company they should drop you down to what's called pleasure with no commuting,” said Hunter.

Estimate how many miles you’re driving now versus pre-pandemic. Hunter said you can ask for your premium to be adjusted to reflect drastic changes in driving habits.

Camille Garcia, with the Insurance Council of Texas, points out mileage isn’t the only factor determining price. When you call to ask for discounts, ensure you understand what is still covered.

“Ask the what-if questions,” said Garcia. “What if I hit another car, what if another car hits me, what if a tree falls on my car?”

Garcia cautions drivers against canceling insurance coverage entirely. Texas law requires drivers to carry liability auto insurance to cover damages to other people or property if they’re at fault in a wreck.

“If you're seeing that it's going to be tough to make that payment, call your agent sooner rather than later,” said Garcia. “It gives both of you time to have the discussions on maybe raising your deductible or lowering your coverages or looking at other ways to save money.”

For drivers who are unable to make their premium payments, Garcia said many insurance companies are working with customers to establish a payment plan or extend grace periods during the pandemic.

“What you don't want to do is completely cancel everything, being unprotected at a time in our lives when really we need as much protection as we can possibly get,” Garcia added.

What’s Next for Auto Insurance Rates?

State law requires insurance companies to charge rates that are in-line with the risk they’re covering.

The Texas Department of Insurance said it’s currently gathering claims data during the pandemic. If it finds an insurance company’s rates are too high, it can order companies to provide refunds.

TDI published a list of auto insurance companies that have taken action in the pandemic.

The Texas Office of Public Insurance Counsel tells NBC 5 Responds it has objected to rate increases filed by auto insurance companies since March.

OPIC published its own list of auto insurance companies that announced reduced rates, refunds or discounted premiums during the pandemic. Scroll down to the auto insurance premiums section of the web page.

What Insurance Companies are Saying

NBC 5 Responds reached out to a handful of major insurers in Texas.

In an email, Chris Pilcic with State Farm writes, “I think one of the best things consumers can do is to have a conversation with their agent. Review your coverage and make sure you’re taking advantage of all the discounts you have available.”

Pilcic points to the company’s telematics app, Drive Safe & Save, that monitors driving behaviors in exchange for a discount. The participation discount is 10% and may increase – depending on driver habits. 

Nationwide tells NBC 5 Responds, “We are building additional benefits of the slowdown into future rates, on a state-by-state basis, and based on frequency & severity trends at the local level. To the extent that lower miles driven or claims volume persists, we are taking that favorability into account in future renewal rates. In some instances, this favorability is offset by higher repair costs driven by more high-speed crashes and higher auto repair shop costs.”

Nationwide adds that customers have the option of signing up for its usage-based products.

Progressive also touts its usage-based insurance program called Snapshot. 

In addition, Progressive noted, in part, “As restrictions were lifted and states began to open back up, we have been looking across the country with each of our product managers, state-by-state, channel-by-channel, product-by-product and adjusting rates given changing loss expectations.  We’re closely monitoring our usage-based insurance data and are seeing personal auto vehicle miles driven and claims volumes steadily increase.   Since the beginning of the pandemic, we have filed rate adjustments in many states, including lowering rates for our Texas personal auto customers by more than 3.5% since June. We’ll continue to monitor our driving and claims data to determine where additional adjustments may be appropriate.”

NBC 5 Responds is committed to researching your concerns and recovering your money. Our goal is to get you answers and, if possible, solutions and resolution. Call us at 844-5RESPND (844-573-7763) or fill out our Customer Complaint form.

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