DALLAS - Texas drivers are in for some savings.
Most insurance companies are now offering discounts on new or renewed coverage plans.
Claims are down, and that means premiums are going down too.
Rates are set before carriers know the true cost of claims. And with so few lately, it's a good time for drivers to save.
In what could be a silver lining to the dark cloud of COVID-19, turns out changing behavior comes at a cheaper cost.
Camille Garcia is with the Insurance Council of Texas. She says despite the state starting to reopen, several carriers are reducing rates, providing refunds and providing discounts.
Here's why: Driving has down so significantly. Projected policy premiums didn't pan out because claims slowed so much.
“The interesting thing about insurance is you set your rates without knowing the true cost of the product,” said Phillip Hawkins with State Farm. “You know what your fixed cost is, but you don’t know your claims are gonna be.”
At the North Texas regional hub for State Farm, their policyholders have logged as much as a 35 percent drop in miles driven. Now, they're taking that trend and using it to cut costs for customers.
“We’ve lowered our rates across the country an average of 11 percent,” Hawkins said.
In Texas, it's even higher. A 12.4 percent drop automatically applied at renewal. And they're not alone. Other carriers are making cuts too, which go far beyond the dividends and refunds announced when coronavirus first came.
“We had no idea how long this was gonna last,” Hawkins said.
For now, it will last longer as those one-time payouts are now officially policy rate reductions, which makes it a good time to shop around and drive home some savings.
“The range of decisions, the range of payment relief, the range of refunds is as vast as the number of carrier that are out there,” Garcia said.
Speaking of home, there is nothing official yet. But with so many people working from home, claims are down too. Things like leaks and fires which would previously go unnoticed are now caught quickly. You might be seeing rate cuts on those policies too.