Are car insurance companies making tons of money during the COVID-19 pandemic?
Lots of people aren't working due to COVID-19. With less people on the road, there are obviously fewer accidents and claims. Are insurance companies recording record profits during the pandemic?
“Although insurance companies are paying out about 20% less in car insurance claims, they aren’t making tons of profit due to COVID-19.
What you’re missing is that many people are reducing their coverage to liability only, or even selling their car if money is tight. In addition, the stock market crash at the onset of the pandemic drastically affected the companies’ profit margins.
Many insurance companies make a bulk of their profit by putting premiums into the market to generate a return. When the market crashed in March 2020, it took a lot of those profits with it.
So to answer your question, some insurance companies might have positioned themselves to “weather the storm” with cash on hand and other assets, while others are probably taking on more debt just to survive.”
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Read advice from car experts at Jerry
Browse by topics
What others are asking
Where can I replace the remote part of my key for a Chrysler?
Do I need to replace the key fob if the buttons don't work? The mechanical key part is fine. It's a 2015.
Jul 23, 2021
Can I get temporary insurance to move my car to another state?
I have been moving around a lot for work and finally have a more permanent location. Because of all this moving, I now have a car at my parents' house in NM, registered in UT, and I live in AZ. Can I get temporary insurance to drive the car to AZ?
Apr 26, 2021
Can I get another home insurance policy if a previous one has been canceled?
My old home insurance policy was canceled a few months ago and I need new coverage. Can I qualify for a new policy?
Mar 03, 2021