Driving less? Changes that can impact your auto insurance premium
Changes that can affect your auto premium
Because of the COVID-19 pandemic, your car is likely spending a lot more time in the driveway and off the road. You may have even decided to put your car in storage for the time being. If you don’t currently have to make your daily commute or are driving less overall, not only can you save on gas, but you might be able to save a few dollars on your car insurance premium. Read on to learn how keeping your policy up to date could help you save.

Heads up! It is crucial that the information on your auto quote and policy are correct. Providing misinformation on your auto policy could end up costing you a lot more in the long run with a cancelled policy or a denied claim. Just like in life, it’s always best to be honest.

If I’m driving less, how does this affect my car insurance?

It’s important that your auto policy accurately reflects how often you use your car. In fact, your driving distance is one of many factors that are looked at when determining your auto insurance premium.

If your commute has changed in length or you’re no longer making a daily commute at all, it makes sense to update your auto policy to match. Reducing your commuting distance on your policy may just result in a lower premium. But, keep in mind that the amount of savings will depend on how far you were commuting originally versus now. Generally, the bigger the difference, the bigger the savings.

Even if your commute hasn’t changed, or you didn’t initially have one, you might find yourself taking fewer or shorter drives. If your overall driving distance has changed, this is another update you can make to your policy. Like your commute, changes to your annual driving distance can impact your premium. The less you drive, the less likely you are to get in an accident or have a claim. So, everything else being the same, having a lower annual driving distance usually also means paying less.

Don’t forget! If you do lower your daily commute or annual driving distance, you’ll need to update your policy again when you return to your regular commute or start driving more.

TIP: Are you a Sonnet customer? You can update your daily commute and annual driving distance through your Sonnet account in a few easy steps.

If I’ve put my vehicle in storage, how does this affect my car insurance?

If you’re not driving at all and have decided to park your car, you may consider switching your coverage over to comprehensive only. (This option isn’t available in Quebec.)

When your vehicle is on comprehensive only coverage, it will still be protected for events like theft, vandalism and falling objects. However, you will not be covered to drive your car under any circumstances. This is because you will no longer have some mandatory coverages on your car including liability coverage and accident benefits. You also won’t have coverage under your policy if your car is hit by another vehicle while parked. (Just another reason to make sure it’s parked in a safe place while in storage.)

As for how this change in coverage could impact your premium, you’d likely see a pretty sizeable drop. This is because you’ll be removing most of your coverages from your policy.

If you’ll still be making an occasional drive here or there, comprehensive only coverage is not an option for you. Also, if you lease or finance your car, your agreement may not allow you to change to comprehensive only. The reason for this is that your leasing or financing contract requires you to carry a certain amount of coverage at all times.

Comprehensive only coverage is designed for when your car will be in storage for a long period of time, and not for switching your coverage back and forth frequently. Like putting a sports or luxury car away for the winter, you want to make sure you take the steps to store your car properly. Improper storage could end up costing you.

It’s vital that if you do choose to reduce your coverage all the way down to comprehensive only that you return to your original coverage when you need to start driving again. Not only will this make sure that you’re legally able to drive your car, but it will help to ensure that you’re protected.

TIP: If you’re a Sonnet customer, you can update your auto coverage any time via your Sonnet account. Not sure you have all the coverage you need? Contact us to make sure you’re protected before hitting the road.

If how I use my car has changed, how does this affect my car insurance?

If you previously used your car for acceptable business use, such as driving to meetings, but this has changed, you may want to think about changing your business use percentage on your auto policy. Using your personal car for business activities is seen as an increase in risk, so updating this detail to reflect your actual usage may provide you with a little bit of savings. But, again, remember to change this back should you return to using your car for business use. Forgetting to do so could mean you won’t be covered if something happens.

On the other hand, if you have decided to begin using your personal car to make paid deliveries or for ridesharing, you need to let your insurer know. Making paid deliveries or carrying passengers for hire is usually prohibited under a standard personal auto policy. Not only does this mean that there is typically no coverage for these activities, but it could also result in a cancelled policy should your insurer find out you were using your car for this purpose and didn’t tell them. Depending on your insurance company, if you want to use your personal car for ridesharing or deliveries, you may need to switch to a commercial policy or pay for extra coverage.

If at this time, you’ve started using your car to support your community by volunteering or offering delivery support, be sure to also let your insurer know. Right now, many providers are waiving the impact on your premium that these activities would normally have. But, it’s best to double check with your insurance provider before changing how you use your car. This way, your insurer can help make sure you have the right coverage.

Is there any other policy change I can make to help save on my car insurance?

We don’t advise reducing your coverage in order to pay a little less. Lowering coverage or bending the truth when it comes to the coverage you need could leave you without protection and paying a lot more if something does happen.

However, one other place you can make an adjustment to save monthly is on your deductible. Increasing the deductible for your physical damage coverage should reduce the amount you’ll have to pay monthly. But, you should only do this if you can afford to pay the higher amount in the event of a claim and if it’s allowed under your agreement with your leasing or financing company.

Coverage your car’s always wanted at a competitive price. How we’re committed to supporting our customers during this time