Car insurance is required in most states. However, the coverage you choose is up to you. You can have as much or as little as you desire, and since most of our daily commutes now involve taking 5-10 steps down the hall to our home office, our cars remain in the driveway. This makes insurance costs high for at-home workers who no longer need optional coverage.
If this sounds like your new norm, you may qualify for lower rates and should consider a different approach to buying car insurance suitable for how you live. Think of the following as a guide to give you the inside scoop on all the money savings that could be had to better budget your income.
Consider Adjusting Your Policy
Insurance companies like Nationwide state that research shows the number of at-home workers will increase to 36 million by 2025. This has led them to create policies like ‘Work from Home’ insurance, a bundle tailored to at-home living. Other insurers likewise realize the demand for a change to their insured’s current policies.
With the increase of available insurance policies like these, here are some strategic changes you can make after weighing the costs of your policy.
Usage Based Insurance
When you drive less, you stay safe and decrease your chances of an accident. This is not to assume that you were going pedal to the metal racing to work every day. But since you are driving less, your record reflects that you are a safe driver. Therefore, it might be wise to adopt usage-based insurance. The rate for this coverage is calculated based on your driving habits.
How? Some insurers install a device that collects data on your driving and communicates that with insurers. If the information being sent back proves that you have safe driving habits, you can save a great deal of money.
Similar to how usage-based insurance rates are determined by how you drive, pay-per-mile insurance rates are determined by how much you drive. Usually, this wouldn’t be ideal if you had a long commute or traveled a lot for work, but these are different times. Why should you pay the same rate as someone who drives twice as many miles as you?
Furthermore, you should adjust your average annual mileage listed on your policy, as it factors into your rates.
Remove Unnecessary Coverage
It makes sense to have additional coverage when you’re on the road for long periods or even just during rush hour. However, when circumstances change, you could be paying for things that will rarely happen anymore. Think about it like this: if you moved to Chicago from Miami, you probably don’t need to pay for hurricane insurance anymore. With that in mind, consider removing the following:
Being stranded on the side of the highway is a terrible feeling. That’s why paying for roadside assistance if you’re in an emergency is the smart thing to do. However, you must weigh the cost of this additional coverage if you’re just traveling around town on the weekends or going to the grocery store. This also makes you consider whether your AAA membership is worth it.
This form of coverage helps pay for the cost of damage to your car if it is in a wreck, no matter who’s fault it was. This provides an added safety net if you cause an accident that leads to costly repairs. However, when you’re at home, the risk of having an accident is low. Paying for collision coverage may be unnecessary in this case.
Increase Your Deductible
This may seem like blasphemy to you, depending on your financial situation. However, it still should be considered. If you are no longer making a daily commute and not on the road at busy times, you will be less likely to file an accident claim.
Of course, before you make any changes, weigh the risk for yourself and consult your insurance agent or professional.
Are You Eligible for New Discounts?
Removing optional coverage isn’t the only way to lower your insurance bill. Depending on your insurer, you could be eligible for new discounts that you can take advantage of if you plan to continue working from home. Some of your options may include:
Low Mileage Discount
Given that mileage is a determining factor in insurance rates, you may be eligible for a low mileage discount that allows you to benefit from not driving your car. Many of the primary insurers, including Allstate, Nationwide, and State Farm, offer this discount.
Safe Driving Discount
Auto insurers love safe drivers, and they reward them handsomely. Now that your car is primarily safe at your home, you can reap the benefits of a safe driving discount. As a low mileage discount, this is very common among top insurers. Each one has different criteria to be eligible, so contact your agent to see if you qualify.
Bundling Auto and Home Insurance
Your car insurance may not be the only thing you need to change. Why not bundle both your auto and home insurance so you can save on each? This is what Nationwide does with their ‘Work from Home’ insurance. If you don’t have Nationwide, ask your agent if they have a similar policy and ways you can bundle multiple insurance coverages to save in the long run.
Find a Policy That Suits Your New Life
Significant changes mean that you will make multiple adjustments to different areas of your life. Those adjustments can save you money, helping you to create financial stability and avoid spending on what you don’t need.
Some of the recommendations discussed may not be best for your situation. However, they are great references to start with when you consult with a professional to discuss the best way to adjust your policy to your lifestyle.