Earlier this year, almost every car insurance provider rolled out some kind of discount to help those affected by the COVID-19 Pandemic. As we enter the winter season, however, most of these “COVID kickbacks” are long gone.
Indeed, COVID-related refunds from all major US insurance providers ended this autumn. If you’re a new or existing customer with State Farm, Geico, Allstate, Travelers, Progressive, or Nationwide, you shouldn’t expect additional refunds this year.
Usage-Based Insurance
However, that doesn’t mean car insurance companies aren’t trying to help during these challenging times. Indeed, most insurance providers are shifting towards a “usage-based-insurance” model (aka UBI) to better reflect the stay-at-home economy. Seeing as accident rates have drastically dropped in many states because fewer cars are taking to the streets, this can be a great option for drivers who are rarely going out.
What is Usage-Based Insurance?
As the name suggests, UBIs charge policyholders by how many miles they drive and their safety record. Companies that provide UBI programs typically install a black box in a policyholder’s car to track factors such as speed or distance traveled.
UBI Trends
While some customers express concerns over privacy, UBIs have become steadily popular as more people work from home. Indeed, economists say interest in UBI policies went up by about 300 percent in 2020. If these trends continue, UBI insurance could be worth roughly $150 billion in 2027.
Smart UBI Systems
Due to the increased demand for UBI policies, some developers are working on intuitive software systems that could track driving patterns from a person’s smartphone. So, future drivers may not need to install black boxes to use UBI systems.
All that being said, you don’t have to opt for UBI to save on your car insurance rate. Indeed, many car insurance companies are offering discounts on an individualized basis.
The best thing policyholders could do now is to call their insurance provider’s customer care division. After explaining your change in work and driving habits, your company may be able to change your policy requirements.
