How Has COVID-19 Affected the Auto Insurance Industry?

Insurance Refunds:

According to III, lockdowns led to a 40.2% decrease in miles driven, prompting auto insurance companies to refund 15%-25% of premiums, totaling $14 billion.

Fewer Claims:

Reduced road traffic during COVID-19 resulted in fewer car accidents, leading to a decline in insurance claims and compensations, as reported by Insurance Business.

Popularity of Usage-Based Insurance

A recent industry survey noted that changes in driving habits increased the popularity of usage-based insurance, which allows policyholders to lower rates based on personal driving behaviors.

Reduced Road Traffic

Lockdowns and remote work practices significantly reduced road traffic, decreasing total mileage by up to 60%, leading to lowered risk for insurance companies and potential premium reductions.

Changing Consumer Behavior

The pandemic has altered consumer behaviors, affecting Gen Zers' purchasing power and car buying intent, potentially impacting insurers' income from premiums, per Urban Institute and McKinsey.

Continued Financial Impacts

Ongoing pandemic uncertainties leave the auto insurance industry vulnerable to financial impacts, including decreased car purchasing intent and potential future shutdowns.

If you’re shopping for the right auto insurance coverage during COVID-19, talk to the team at Jack Stone Insurance Agency to get started on your reliable coverage.  Serving Antioch and neighboring cities in California, we are ready to find the right coverage for you today. Click on the link below to contact us today!