The side effects of COVID-19 are far reaching, and yet to be fully realized. 'Unprecedented' is a term thrown around more than we'd like to see or hear it but it is an accurate term to describe our current state. You may be faced with a financial reality that could never have been predicted, but is forcing you to make tough decisions.
With this chart, we list various levels (prescriptions) you can take to reduce your auto premium, as well as the side effects. Some of these options we would never recommend, but as your advisor, we wanted to let them know they exist, especially if you are confronted with a very difficult financial reality.
As always, contact us to discuss ways we can help.
| Prescription | Applies to: Commercial and/or Personal Auto | Benefits | Considerations |
| Combine home and auto with the same insurance company for multi-policy discounts | Personal | Saves premium on both policies. In addition to saving anywhere from 10% - 20%, there are benefits to having your insurance with the same carrier. | Improved coordination of coverage with same company and same agency. |
| Reduce mileage if no longer driving to and from work | Personal | Saves premium | Expect premium to increase when mileage is changed back to account for commuting to work. |
| Increase Comprehensive and Collision deductibles | Personal and Commercial | Saves premium | Premium savings may be minor. Consider quoting before processing a change. If you have an accident, your out of pocket deductible will be higher. Ask: Do you have the cash on hand to cover the deductible? If not, increasing deductibles may not be a good option |
| Remove Comprehensive and Collision Coverage | Personal and Commercial | Saves Premium. This is a good option if you would not:
| If a vehicle is financed, you cannot remove Comprehensive and Collision Coverage.
This is not a good option if: You would need insurance to help repair or replace the vehicle. |
| Lower limits (Liability, Uninsured & Underinsured, and First Party Benefits) | Personal and Commercial | Saves premium | We strongly advise against this, but only offer it as a last resort and/or temporary option. Lowering limits gives you less asset protection if you're involved in an accident where you hurt someone or damage their property. If you are responsible for damaging someone else's vehicle, this is an auto liability claim on your auto policy. Defense costs are also included in liability limits. If you are injured in an auto accident, your own medical bills are paid from the auto policy (with no deductible) before any health insurance pays. Most people do not have the cash on hand to pay for these potentially large expenses. How much liability limit is enough? How low liability limit is too dangerous? |
| Remove the vehicle from your policy completely | Personal and Commercial | Saves money | We strongly advise against this, but only offer it as a last resort and/or temporary option. This cannot be done if:
The only way we can remove a vehicle from your policy is if you no longer own it, or if the tags are returned to the state. |
*There are various ways to delete a vehicle from your auto policy (if it is not sold or traded in). Following is some guidance on what you should do before removing the vehicle from your insurance policy.
1.If you junk the vehicle:
a.Get bill of sale as a record the vehicle was junked.
2.If you're keeping the vehicle but returning the tags
a.If you're keeping the vehicle, but want to remove all coverage, the tags must be returned to the state. Severe caution must be observed because when you remove coverage from the vehicles that is still owned but have no tags there is no liability coverage on those vehicles. If someone would "take one for a joy ride" or use the vehicle for any reason and cause Bodily Injury or Property Damage, there is no coverage. Period.
Considerations when sending the tags back to the State
There are various ways to send the license plates back to the State:
- In the Mail but it must be accompanied by form MV141 which can be secured from the PennDot/MD - MVA website (Note: the MV141 is for Pennsylvania-registered vehicles only)
- Complete sections A, B and the Bottom of the form if it is the owner returning the plates.
- Send via Priority or Certified Mail for tracking purposes but mostly as proof that the plate was being returned. Without this there is no proof.
- Make and Keep a copy of the MV141 form
- Tag & Title/Notary
- Law Enforcement Office
- Penn Dot location
If you're doing this to save money but expect to use the vehicle again in the future, you would need to secure license plates, and that process could see a delay. There would be a Renewal Fee, Plate Fee and Notary Charge.