One in three consumers became underinsured or uninsured through the pandemic, according to recent research from TransUnion, the consumer credit reporting firm.
If you’re one of the many households that had to focus on immediate expenses or paying down debt during COVID, at the expense of your insurance policies, now’s the time to get your coverage back in order.
Here’s how you can make it that process as stress-free — and affordable — as possible.
Drivers dangerously underinsured
Americans stuck closer to home throughout the pandemic. For those working from home, the commute changed from sitting for an hour in traffic on the freeway to simply stumbling from the kitchen to the office.
Because of that, many auto insurance companies offered special pandemic discounts. And some consumers chose to downgrade their coverage or cancel it altogether.
While 70% of people believe having auto insurance is important, 34% told TransUnion in a March 2021 survey that they went from being fully insured to under or uninsured during the pandemic.
On top of that, nearly one in five missed one or more payments over the last year and 27% fully canceled their policies.
But TransUnion also found that the group they surveyed hadn’t taken advantage of all the savings opportunities available to them — only 20% adjusted their payment plans and just 32% raised their deductibles to lower their monthly premiums. And then a mere 32% reduced their coverage through the crisis.
That means millions of drivers across the country could be overpaying for their car insurance by up to $1,100. Fortunately, if you shop around for an affordable policy, you could save you hundreds every month.
Home insurance rates could go up
One industry that flourished through the pandemic was the housing market. Existing home sales rose from 5.7 million in February 2020 to 6.2 million this past February, and the average sale price increased by 16% over the same period.
So how did this impact homeowners insurance?
For starters, more valuable homes are more expensive to insure, so rising sale prices tend to be followed by rising homeowners insurance premiums.
TransUnion's research also noted that many homeowners left the city for less densely populated areas, thus altering the risk levels for all homeowners in those areas. Increased demand in these outlying regions mean rates may change for everyone.
While finding suitable homeowners insurance is a must, overpaying is not. If prices are set to go up in your area, that may be the ideal time to look for a new policy.
Like with your auto insurance, you could save a few hundred dollars every month just by shopping around and comparing rates on offers.
Where to go from here
Now that the worst of the crisis is behind us, it’s a perfect time to get your whole financial house in order.
Here are some excellent options to help build a solid financial foundation and ensure you can ride out anything that comes your way.
Don’t overlook other important policies. After you’ve put in the time to get the best rate on your other insurance policies, don’t forget to lock in affordable life insurance, too. If the pandemic has taught us anything, it’s that life comes as you fast. Set up a policy now to ensure your family is financially taken care of if the worst were to happen.
Save big without clipping coupons. If you’ve got the taste for savings, download and use a free browser extension that will scour websites for the best prices and coupons, guaranteeing that you’re always getting the lowest prices whenever you shop online.
Invest like a pro for pennies. Both insurance and investing can be intimidating, but now that you’ve cracked insurance, why not find an easy way to invest too? With the help of a popular app, you can easily break into investing with your "spare change” and turn your pennies into a diversified portfolio.