How has COVID-19 affected insurance?

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Our lives have fundamentally shifted during the COVID-19 pandemic, which began March of 2020 and is still in effect worldwide today. Lock-downs, social distancing and other restrictions have affected every aspect of our lives, and that includes in the insurance industry.

While many people have gotten more accustomed to virtual interactions these days, COVID-19 has accelerated the need for less in person meetings in favour of increased reliance on online methods of interaction. In our social and business gatherings, it has become more frequent to do so over Zoom, with the phrase “you’re on mute” increasingly entering the lexicon of conversation.

Our interactions with our brokers may have gone more virtual, but nonetheless are still a vital part in the obtaining of insurance coverage as a consumer. However, one of the pressing questions surrounding insurance during the COVID-19 pandemic is how it has affected premiums and how much you pay for it.

According to Alistair Campbell, the CEO of the Property and Casualty Insurance Compensation Corporation (PACICC), the medium impact on the auto insurance sector could be an area to watch out for in the coming years.

“The auto line of business in Canada has been historically – and in recent times – one of the most problematic. The idea that there is going to be a marked decline in the accident frequency and claims frequency is certainly extremely likely given the dramatic reduction in kilometres driven,” said Campbell, adding that we won’t see this effect come to fruition till Q2.

During 2020, a number of prominent auto insurance companies began offering temporary reductions in premiums as scores of policyholders began staying home more often than going out, dramatically reducing their car usage and therefore the kilometres regularly driven. However, as 2021 unfolds, the overall impact on the auto insurance sector, as well as the insurance sector as a whole, is still unclear because of the unpredictability of when lockdowns will end in various jurisdictions.

These are questions that consumers should pose to their insurance brokers and representatives in order to figure out what changes need to be implemented in one’s own personal insurance that best reflects their vehicle use as the COVID-19 pandemic continues to be a regular presence in our lives. If you would like to reach out to one of insurance broker representatives to see what changes can be made to your insurance policy, please contact [email protected] or call us at (416)494-1268 to speak to our knowledgeable multi-lingual team.