Are Car Insurance Premiums Necessary During Lockdown?

As of March, 2020, California and most of the United States are in lockdown mode. Some insurance companies have started to advertise premium refunds, prompting people to ask; “Do I need to keep my car insurance during the lockdown?”

The answer isn’t a simple yes or no, it’s more situational and perhaps a modification. So let’s look at some scenarios.

Scenario 1: You continue to operate your car, but just to go to the grocery store.

In this instance, we suggest you continue to maintain all of your coverages. In the event you are involved in a car accident that is your fault, your liability coverage will protect you to the extent of limits you purchased. We recommend getting the highest limits possible to protect yourself and your family against liabilities you may incur if you injure others.

In addition, if you are hit and injured by someone else and it’s not your fault, you will very likely need uninsured or underinsured motorist coverage. This will provide coverage to you for lost income, medical bills, pain and suffering and other damages if the at fault driver does not have enough car insurance. This is very common, so, we recommend getting high uninsured motorist coverage limits. Often the premiums are not much more, but the coverages can increase significantly, to protect you by multiples of thousands.

Lastly, we recommend including medical payments coverage on your policy. This type of coverage pays medical bills incurred as a result of a car accident. While most people think their health insurance will cover that, they don’t find out until it’s too late that even with health insurance thousands of dollars of care may not be covered by your health plan after an injury accident.

We understand that suggesting obtaining high liability, uninsured and medical payments limits may seem counterintuitive at a time when saving money is critical, but for a small increase in premiums, coverages can be significantly increased. This, in turn, can save tens of thousands down the road if you are involved in an injury car accident.

You should also ask your car insurance agent to check other coverages, such as collision, comprehensive and any other available coverages to make sure the current coverage you have is appropriate to your risk level.

Scenario 2: You are not driving at all.

In this instance, you may consider reducing some coverages. But, before you do, make sure you are truly not going to drive at all, even for a medical emergency. You don’t want to reduce coverages, forget you lowered them, then drive the car for an emergency and be involved in an accident.

If you do reduce any coverages, we suggest working with your agent to see how much you’d actually save, what coverages remain in tact, and then evaluate the risk/benefit. Remember to calendar a weekly check in on the issue. If you reduce coverages, the lockdown lifts and you are back on the road, you will need to increase coverages before returning to driving.

Be extremely careful about cancelling coverage all together. Remember, your policy may include theft, fire and other damages and even if you are not driving your car, if it is stolen or burns and you cancelled coverages, you will be without recourse.

If you have been involved in a car accident that was not your fault, and were injured, call the attorneys at Phillips and Pelly at 858 794 1700 and we will provide a free analysis of which coverages are applicable to your situation.