Impact of COVID-19 on Your Existing Insurance Policies

COVID-19 pandemic has a significant impact on the insurance industry and its customers. Initially, to weather the storm, the California government asked insurance companies to delay premium payments due to the financial hardship people are encountering.

How COVID-19 Has Left its Impact on Your Existing Insurance Policies

Like in the rest of the world, people in the US are facing financial challenges due to job fallout amid the COVID-19 pandemic, got temporary relief in terms of insurance payments.

For example, California has asked all insurance companies in the state to offer a minimum of 60-day grace periods for insurance payees.

• Every company is different. Call us or your company directly to ask for a delay in payment due to COVID issues.
• Most auto insurance companies are automatically refunding all clients 15-25% of their premium due to less driving and claims.
• Most homeowner insurers are delaying or stopping planned attempts to cancel policies due to the 207-18 fire disasters.
• Business insurance clients can also ask delays in payment due to COVID, but you need to ask.
• Due to lower miles driven, sales made and payroll, call us for mid-term reductions in the premium impacting factors.

We can also expect more changes in insurance pricing and policy terms as insurers are struggling due to the economic impact of the outbreak.

Over the past couple of months, the insurance sector has modified group insurance policies due to COVID-19, and more to come.

Read Also: How COVID-19 Has Forced Many Americans to Re-Assess Their Retirement Planning

Here is a list of types of insurance and their potential changes:

Type of Insurance	Changes due to COVID-19
Auto Insurance	In the auto insurance sector, the nature of risk has changed drastically since February 2020, as automobile usage has nearly stopped to comply with social distancing measures. Similarly, changed economic circumstances are also affecting the usage of commercial vehicles. Soon, there will be shrinkage in the portfolio size, along with proportional reductions in contributions.
Home/Property Insurances	Due to COVID-19, many people have converted their homes into workplaces, and some people are living elsewhere for an indefinite period. Modification of some clauses is expected regarding unoccupied properties to continue with the coverage.
Commercial/ BusinessInterruption Insurance	Due to the increasing number of business interruption claims and disputes, many business insurance policies are contemplating whether to include or exclude virus-related losses. In the existing policies, business interruption cases are ambiguous for COVID-19. Policyholders will need to provide evidence that their commercial property was contaminated and not merely at risk of contamination. Some new clauses are expected around this.
Health Insurance	Private health insurance policies are likely to undergo significant changes, including higher pricing. Insurers are responding to the current crisis by expanding telemedicine services and waiving cost-sharing obligations on testing. The implications of the cost will extend beyond direct interventions for coronavirus cases.
Term Life Insurances	Increased mortality rate will directly affect the costs of term life insurance products. There will be cost implications in the coming years as well.
RetirementPlansand Annuities	Some changes in the retirement plans are likely, as a large population has started modifying their asset allocation. Some people have also begun claiming their social security earlier than expected.
Disability, Accident and Sickness Insurance	A higher rate of morbidity, along with increased claims costs associated with limited hospital supply, will raise the price of insurance policies.

The Way Ahead

Amid the ongoing uncertainty due to COVID-19, many changes in the insurance industry are reactive. Eventually, when things settle down a bit, more flexible and efficient clauses may come up to save the interest of both insured and insurers.

To have more clarity on existing policy changes, call us at (650) 328-1000 or email to abcosales@alliedbrokers.com, and we will get back to you shortly.