Covid-19: Fewer cars on road will my auto insurance decrease

Covid-19: Fewer cars on road will my auto insurance decrease

Town streets were empty after the countries were in lockout because of Covid-19. The number of journeys by car has fallen significantly.

How does the Car Insurance market affect Covid-19? Our team MyMoneyMyQuotes analyzes the data after reviewing pre and post corona time periods .We have come up with the following insights based on the information.

  • The number of journeys and kilometers fell by 40 per cent
  • The average distance to short journeys rose
  • Public transit to work is limited to 0 per cent
  • Fewer people driving together, and thus less carpooling
  • Fewer people out for drinks, dinner, sporting and cultural activities.

The lockout shift in the Coronavirus has put another well-known issue to the spotlight: “Why do insurance providers guarantee their clients get good rates? Another serious situation is the lockout. Not everybody rides the same miles in our daily lives and not everyone is a patient pilot. What do insurers incorporate this amount of risk into the rates for their customers? The Covid-19 crisis highlights a need for Usage-based Insurance (UBI) approach where each customer’s insurance plan is calculated by: 

  • How far he/she charges his / her car-Pay While You Drive (PAYD). 
  • The driving actions of the client-Pay What You Drive (PHYD).

Suggested Post: Common Questions for Auto Insurance

‘Fewer cars’ does not mean ‘Lower risk’

  • Only because there are fewer vehicles on the lane, it doesn’t equal lower risks. The auto premium reduction act only took into consideration how much user drives (PAYD), but did not take into account the driving behavior of the user (PHYD). So the simple auto premium reduction solution may seem premature Most drivers have driven considerably fewer since the start of the crisis and the total amount of traffic has reduced, but even the number of traffic accidents has not reduced proportionally. They ought to measure the driving actions of consumers and use it to facilitate healthy driving. This is the best way to reduce the potential danger and make the roads safer for all.
  • According to Automated Insurance, traffic volume in New York City declined between 78 per cent and 92 per cent relative to January, but in the ten days after the Governor’s stay at home directives, there was a 57 per cent rise in speed violations. And traffic deaths in Minnesota have risen by around 50 per cent at a period when traffic has dropped by about 50 per cent. During lockout in California. There was an increase in downpour accidents and drivers keeping faster speeds on roads that would normally be congested were due to these.
  • In brief, the COVID issue shows understanding how people travel is more important than the number of vehicles on the highways for risk management. 

Post-COVID-19 effects on auto insurers 

  • We noticed that trips are dropping more than 35%.. This decline is associated with the ‘intelligent lockout’ in The Netherlands where people work as much as possible from home. 
  • Fewer journeys and kilometers in combination with reduced road travel have a favorable impact on the volume and severity of allegations. Therefore, we shall see a good impact in the short term. On the other side, the journeys have been shorter, and more drivers are using vehicles for short trips, which may result in more parking- and paint-damage lawsuits. 
  • Insurance firms should make assumptions about whether they can predict the covered people’s habits in the long term.
  • In the culture of Post Corona, people can make other decisions, restrict their leisure time and travel. The future is becoming increasingly uncertain, so insurers should develop hybrid insurance models for this time of Post Corona.

How will insurance providers do to handle the risks reported by COVID 19? 

There are 3 main technologies used to ensure precise measurements of the mobile UBI (PAYD & PHYD)

  • Recognition of transport mode: Transport mode recognition technologies can determine specifically when a person is commuting by car using the cell phone’s motion sensor data. 
  • Driver / passenger detection: When identifying a vehicle ride, an insurance provider needs to ask if the recipient is the driver or the passenger. The positive thing is that a Mobile-based driver/passenger recognition system is possible to identify the disparity through sophisticated machine intelligence and AI technologies. 
  • Insights into driving behavior: Smart and precise driving ratings to assess driving behavior.

The future of data-driven risk control 

  • The future of auto insurance will be better than now. The way we work, the way we fly, the way we go shopping and on holiday. The opportunity for insurers to exit the trenches to develop innovative personalized goods and services for their current and potential clients is available here.
  • Consumers will operate more from home, but private car usage will also increase, with fewer skilled drivers on the road at busy hours as well. Pay-per-mile approaches are not providing safe roads, nor are pay-how-you-drive. And it combines efficiency with the increasing use of private cars. Public health goes hand in hand with planetary protection.

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