As COVID ends, watch for consumers to report changing conditions

Now that the commute back to the office is a distinct possibility in the upcoming months, insurance providers should be making sure their clients have the right level of auto insurance coverage, particularly if it changed during the pandemic, the exec of a rate comparison site says.

Since the COVID-19 pandemic began in March 2020, many drivers have been driving much less, if at all. This prompted many Canadian property and casualty insurers to offer premium relief to consumers. Insurance Bureau of Canada has reported that insurers have provided nearly $2.5 billion in premium relief to home, auto and business customers since the start of the pandemic.

On average, insurers offered about 15% in savings to those who lowered their kilometres, Matt Hands, director of insurance at rate comparison site Ratehub.ca, said in an interview Tuesday. In addition, they they offered about 75% to 80% in savings to drivers who took their vehicle off the road and had just a basic level of coverage.

Hands spoke with Canadian Underwriter about some of the ways consumers might benefit if they took a more proactive approach towards changing their insurance coverage. A national Ratehub poll of more than 1,300 Canadians with auto insurance found that 57% did not reach out to their insurer about premium discounts, while 38% did.

For clients who proactively changed their policy conditions, they’ll need to consider reaching out to their insurance providers once again, as COVID-19 restrictions start to lessen, Hands said. “You may need to change your situation again to reflect the fact that you will now be using your car more, or starting to use it again. And you want to make sure you have that right level of coverage in place.”

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Some clients may have moved during the pandemic, which could also affect their insurance rates. “[Insurance] is very easy to set it and forget it, because it’s just a piece of paper that sits there,” Hands said. “Any you only think about insurance when you need it.”

Hands advises brokers and agents to talk to their clients about the serious repercussions associated with not updating policy coverage conditions. The consequences may include having a claim denied or a policy cancelled, Hands warned, depending upon how serious the insurer considers the “misrepresentation of facts” to be.

“A lot of people think that their policy can’t change until its renewal or they’re starting a brand new policy,” he said. “That’s not true. You can reach out to your insurer whenever to address changes in your policy.”

Hands recommends that consumers take “20 minutes out of your day” to review the policy, even if it’s at renewal time, to ensure the right coverage is there. They should should make sure everything in the policy makes sense and is still needed. Where appropriate, they might ask themselves if a better market is available for their specific needs.

If so, Hands said, “spark up a conversation with that broker or that direct insurer to see if the savings are substantial enough that it’s worth porting over your policy.”

Also, clients might be able to get discounts for union or alumni memberships. “You may not have been part of a union or an alumni association when you started with your insurer,” Hands said. “But over time, you may have joined one, or completed a degree… and now are eligible for these discounts. Those can always be applied retroactively later on.”

Since the pandemic began, Hands said he has seen a “significant uptake” in usage-based insurance.

“That’s the best program where you can actually take full control…of your insurance policy, and you’re only paying either based on how you drive or how much you drive,” he said. “More companies are considering programs now, too. So, I think that the marketplace for the next few years is going to become a lot more competitive and enticing to customers.”

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