The COVID 19 pandemic is affecting every area of our lives. People are trying to make ends meet in the face of a health and financial crisis. What has been the response from Canada’s insurance industry? Here is how you can take advantage of various changes in the industry and manage your insurance like an expert.
Allstate Canada, and its subsidiaries Pembridge and PAFCO, just announced a Stay at Home Payment to customers. Clients already insured with Allstate, Pembridge and PAFCO will receive a one-time cheque equivalent to 25% of their May payment. Customers need not do anything to receive the cheque but are encouraged to stay home in order to slow the spread of COVID 19. This is the first insurance company in Canada to announce premium relief. More will follow shortly to be sure. Stay tuned here.
Aviva Canada and its subsidiaries have announced a price freeze on renewals starting June 15, 2020. During a hard market in which premiums are going up on average 15%, this could mean 15% savings or more for clients insured with Aviva. We still recommend customers discuss your renewal with us and see if there are other options to further decrease your premium. However, this price freeze will go a long way in saving consumers money.
Are you driving less day to day to work, or is your annual mileage lower? If you are like most Canadians, you are driving less during this pandemic, even if you work for an essential service. Contacting your broker and updating your daily or commute or annual mileage can decrease your rates up to 10%. Make sure your broker knows about your specific driving changes.
Are you parking your car for a prolonged period of time? Let’s say approximately a month or more during the lockdown? If you are not driving at all, you may want to consider a suspension of coverage change. The OPCF 16 form is a policy change that will suspend coverage on your auto insurance policy for Liability, Accident Benefits, Direct Compensation. It will keep collision coverage and comprehensive (fire and theft) coverage in place. You will need your vehicle to be parked in a garage or driveway, not on the road.
This change is not for everyone. If you drive, even once to go get groceries, you are not covered at all. You’ll also have to call to reinstate coverage with an OPCF 17 change form when you want to drive again. If you’re the forgetful type, you may not want to start this process. This change is often used by snowbirds or people leaving the country for travel for extended periods of time. You also cannot keep adding and removing this coverage. This is usually a one-time change per year.
Over the past decade there have been many Usage Based insurance products appear on the market. Usage Based Insurance involves either a dongle installed into your car’s CPU or a phone app. Both are used to monitor your driving habits including your mileage, speeding, hard cornering or hard breaking. The idea is that you should only pay for how much you drive or how risky you drive.
If you are driving less, most of us are, you can take advantage of large discounts for parking your car. The app or device will automatically monitor that your car is not in use and pass along discounts of up to 25% for not driving. If you’ve never tried Usage Based Insurance, now might be the time to start.
If you’re a family with more than one car, you might want to consider parking one of the vehicles. Do you need to do a grocery run, drive to work as an essential service, or pick up needed supplies? Do you need two cars to accomplish this? If you drop one car to comprehensive coverage only (fire and theft) and park it safely, you can use the other car to do all the driving. Inform your broker and save half of your insurance premium. This makes a lot of sense for every family with multiple cars.
Similar to other financial services such as the mortgage industry, you can now defer insurance payments temporarily. This gives you the option to push back a payment or two while the pandemic lasts, allowing you to get back on your feet. The downside of this is paying a double or triple payment a few months from now. If you can’t afford the eventual payment, you do not want to get your policy cancelled. Other options may be better for you. Check with your broker to see what options are available with your specific insurance company.
If you’ve ever bounced a payment you might know that the bank will charge you NSF fees and most insurance companies will as well. For the time being, some insurers are waiving NSF fees, often $25 or $50. This temporarily removes any penalty for missing payments while people are suffering hardship due to the crisis.
Some insurers have gone as far as to not cancel you if you miss payments. Instead you will be contacted by your broker to arrange options to keep the policy going and arrange for payment at a later date. We do not recommend letting things go this far. There are better options to proactively manage your insurance. However, this is a nice safety net in this frantic time period should insurance not be top of mind for you.
If none of the above options works for you, and you see no way in which you can keep your insurance going, you should cancel your policy. Usually when you cancel your policy there is a
short rate cancellation fee” usually equal to one month worth of premium. Many insurance companies are not waiving that fee entirely upon request. We see this as a last resort because there are many other good options available now. However if you sell your vehicle or do not foresee being able to pay insurance premiums for months you may want to proactively cancel.
Do you think you’re paying too much for insurance overall? Now that we have some time at home you may want to shop online and find out what you really should be paying. Begin Insurance represents 17 major insurance companies for auto insurance. We can likely save you some money by shopping with us.
If you are unsure your best course of action please contact us. We have many options to help you through this time. Our offices are closed, but we are open for business. Call us by phone, get quotes on our website, text us, hit us up on social media. We are ready to find the right solution to save you money during this trying time. Let us help make things easier for you so you can focus on more important things in your life.
Please visit us periodically for more updates on ways to save you money.
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