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.”
Eric Schad
Answered on Apr 23, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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