Founder @ NowSourcing. Contributor @ Hackernoon, Advisor @GoogleSmallBiz, Podcaster, infographics
COVID-19 has changed the way many of us live our lives as stores, restaurants, and more have begun closing up shop, causing many to lose their jobs or start working from home. With millions now stuck in their homes, people are driving much less. Less driving means fewer low-speed accidents, and fewer incidents of aggressive acceleration. Insurance companies have started to give back to their customers to help them financially through the pandemic. Insurance companies are offering financial assistance and more flexible payment programs, penalty-free grace period for late payments, to pause cancellation due to non-payment, and waive deductibles for commuting healthcare workers. In response to the sharp decrease in Americans’ driving mileage, some of the nation’s largest insurers have begun to refund auto insurance premiums. Companies such as Allstate, Geico, Progressive, and StateFarm have returned a total of $14 billion to policyholders.
Even though many people are driving much less than usual, a total refund is most likely not coming for a number of reasons. Auto insurers are held back from offering a full refund because of variations in the severity of accidents, unpredictable changes in driving habits, claims for delayed repairs due to lockdown, and increased repair costs due to supply chain disruptions. Less driving could even lead to more insurance claims as data has shown that less traffic results in more high-speed incidents - an increase of 50% has been seen in accidents over 70 miles per hour, and a 30% increase in driving over 100 miles per hour. An increase in speeding also leads to an increase in claims, more severe accidents, and higher cost claims.
A possible solution to decreasing car accidents and lowering auto insurance premiums would be with autonomous vehicles. In the future, the use of autonomous vehicles could lead to fewer insurance claims, lower premiums, and a shift in liability. For autonomous driving, liability will shift from the driver to the vehicle itself, causing driver behavior and prior claim history to become irrelevant, and new calculations will have to be made to determine risk.
Learn more about a simpler approach to insurance and other ways insurance givebacks are here to help us here:
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