The car insurance changes to make post-COVID

The COVID-19 outbreak of 2020 not only irrevocably changed the course of history – it also changed the way we use our cars.

While a lot of the changes that came about as a result of the pandemic were negative, drivers may find there were some unexpected silver linings in relation to their car insurance costs.

For insurer Youi, the first signs of behavioural change came when its COVID Premium Relief Campaign was met with widespread uptake.

“Around 50 per cent of Youi’s car insurance customers opted into Youi’s Covid Premium Relief campaign, which provided discounts of up to 15 per cent off a portion of car insurance premiums for customers that were using their car less due to Covid,” said Youi CEO Hugo Schreuder.

“The response to this campaign was incredible and Youi is proud to have been the first insurer in Australia to offer such relief.”

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But the shift didn’t stop there, as several states recorded a drop – and then a rise – in claims as a result of motorists spending less time on the road during lockdowns, then returning in full force when restrictions were lifted.

“Nothing about 2020 was predictable, including motor vehicle claims. While all states had sharp dips in claims volumes in March and April, claims numbers picked up rapidly when drivers were able to get out and about more in May,” Mr Schreuder explained.

“Throughout the year various states, such as Victoria had reductions in claims volume as restrictions came back into force and coronavirus restrictions limited people’s movements, but the claims patterns were very different in other states where drivers were not restricted and able to travel more extensively.”

What does it all mean for drivers? If you’re not using your car like you used to – whether you’re commuting less, or commuting differently – you may be able to lower your car insurance premiums with a quick phone call to your insurer.

Here are the various ways you might have changed your driving habits without realising, thereby changing your car insurance policy and costs.

You might still be commuting to and from work, but if you’re doing half days, or spending mornings or evenings at home, it’s likely you’re skipping peak hour travel.

We know the pre-9am and post-5pm periods are when a large number of accidents occur as a result of an influx of commuters and parents doing the school run.

Those who have strayed from conventional work hours may now find their commute is taking place in the off-peak period, meaning their chance of being involved in an accident could be lowered due to decreased time on the road.

“Commuting less, whether it be in peak hour or other times, can have an impact on premiums, as less time on the roads means less chance of an incident occurring," Mr Schreuder said.

Roy Morgan data from July 2020 found a whopping 3.9 million Australians were working from home – representing 25 per cent of all working Australians.

While these numbers are likely to have dwindled since restrictions were lifted, the pandemic has activated an irreversible lifestyle change for many workers who are now empowered to base themselves out of their homes.

As a result, you may be spending less time doing the daily commute.

“Since Covid hit Australians lives have changed dramatically, including how we use (or don’t use) our cars. As work from home arrangements have increased and remained in place in 2021, some people are driving less, which in turn means less risk of an accident,”Mr Schreuder explained.

This is good news for your future claims history, but it’s also likely to lower your premium, so give your insurer a call and provide them with an accurate estimate of how much your time on the road has been reduced.

For many people, driving to work means leaving their car unattended on the side of the street for long hours, rather than safe at home in their private driveway or garage.

Thus, a rise in people working from home more regularly has seen a decline in the need for street parking, thus reducing the risk to the vehicle.

“Ultimately this shift means some cars are more frequently parked in secure garages, rather than outside at work or near the train or bus station, so these cars are better protected from theft, accident or weather damage,” said Mr Schreuder.

“Life changes such as this may be able to reduce premiums, so if your motor vehicle usage has changed in this way it would be wise to shop around or contact your insurer to see what savings are available. It could save you lots.”

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