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Your Insurance-Related COVID-19 Questions Answered

During this time of uncertainty, AAA insurance experts address your top concerns.


Like a security blanket or your favorite comfort food, insurance offers reassurance; it’s good to know it’s there, just in case.

Now with the COVID-19 crisis, it seems like a lot of those “just in case” scenarios have happened all at once, and you may be wondering how your insurance can help.

Whether you are a small business owner that was forced to shut down your operation or the whole situation has you thinking – or rethinking – your life insurance coverage, the insurance experts at AAA answer some of the most common questions they have been hearing.

If you would like to discuss your policy or get a quote, our agents are here to assist.

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Making Sense of Life Insurance

One of the best things you can do for your loved ones is to make sure they are protected and secure.

Auto Insurance

Should I cancel my auto insurance if I’m not driving my vehicle? Is it OK to let my auto policy lapse?

Unless you are getting rid of your vehicle, you should never cancel your policy, even under the current circumstances. Ray Eng, vice president of insurance sales, explains why.

    • Auto insurers rate in part on whether someone had prior insurance and for how long, and when there’s a lapse in your coverage, you will pay for it … literally. When you go to reinstate your insurance, you will get surcharged until you rebuild that tenure.
    • Even if your car isn’t being driven, you’re still exposed to certain risks that you need coverage for. For instance, if your car is typically parked in a public area, there is still the chance of theft or damage from another vehicle.
    • You can’t always predict when you may need to drive again. If an emergency arises that requires you to drive your vehicle and you’ve canceled your policy, you’re not only lacking coverage if you need it but you’re also breaking the law.
    • There are different ways to lower your premium for a period of time that are thoughtful and don’t fully put you at risk. Some options include increasing your deductible or going to liability-only coverage for a set time frame. However, if you lease your vehicle or have a car loan, you may be in default of your contract if you don’t maintain adequate insurance coverage. Always consult with your agent before making coverage or deductible changes.

what is uninsured motorist coverage

I’m driving less or not at all. Will I get an insurance refund or a low mileage discount?

Virtually every auto insurer has announced some level of premium credit in recognition of their customers driving less and as a result, claims decreasing. These credits generally range from 15% to 25% on your premium for the months of April and May.

There is some level of nuance to how each insurance company is handling premium refunds, so it’s best to contact them or your agent directly if you have any questions.

It’s also worth noting that many insurance companies are offering the same reduction in premium to new customers as they are to existing customers, so it doesn’t hurt to contact your agents to make sure you are saving all you can.

Life Insurance

Does life insurance cover deaths that occur due to COVID-19 and pandemic-related illness?

In general, the answer is yes, says Brenda Silva, life insurance specialist. Most life insurance policies that were written before the pandemic and are currently in effect wouldn’t restrict COVID-19 related claims.

Many of the companies that AAA Insurance works with have implemented new or temporary guidelines for those that are applying for life insurance during this pandemic.

Depending on the insurance company and an applicant’s resident state, there could be an initial waiting period for acceptance of insurance if the person has had COVID-19, has symptoms or has been in contact with someone diagnosed with the virus.

The company may require a health assessment before offering you a policy, or given your unique risks, may postpone a decision on granting a policy.

Are there any life insurance products that I should be considering right now? 

Life Insurance can not only provide peace of mind but also act as an investment. One type of policy worth considering is a term life insurance plan that offers a return of premium.

Return of premium is a term life insurance plan – sold as a 10-, 15-, 20- 25- or 30-year policy – that gives customers the option to get their money back if they outlive the term, or keep the money in a AAA account and have it paid into a whole life insurance policy that you never have to contribute to again as long as you live.

In short, you get a money-back guarantee along with the benefits of a life insurance term policy – which are generally less costly than whole life policies and usually have a speedier underwriting process.

In comparison, a whole life insurance product is about twice as much as the term return of premium, with half the death benefit. And while a regular term policy is half the price of return of premium, it offers no death benefit if you outlive the term; you would need to take out a new policy.

People between the ages of 18 and 55 may want to consider a term life policy that includes a return of premium option. As with any life insurance policy, the rate you pay is determined by a number of factors including age. Most people need less of a death benefit as they get older – maybe they’ve paid off their mortgage or their kids’ education. In this case, return of premium is worth the extra cost for the peace of mind knowing that protection is in place that can last a lifetime, whether a heath issue comes into play that would otherwise disqualify you from getting life insurance or not.

For more information, AAA insurance customers can visit AAA Life. Please note that AAA is not selling life insurance in New York at this time. 

If you have any question about if you should get life insurance, Bryan McLane, an insurance agent at the Rhode Island Middletown Branch gives his customers an easy way to think about it. “If you had a golden goose that laid golden eggs, would you insure the goose or [just] the golden eggs that it produces? Well, right now you are the golden goose for your family and you’re only insuring the home, autos, (the golden eggs you produce). If something were to happen to you or your income [without life insurance], there would be no more golden eggs and your family’s goose is COOKED!”

small business insurance

Small Business/Commercial Insurance

Will my business policy cover me for income loss due to COVID-19??

Unfortunately, small business owners should not anticipate long-term coverage for business income losses.

“Standard business owner polices offer little to no coverage for business income loss,” according to Steve Holland, manager of commercial lines.

The good news is that AAA insurance agents have been working with clients to do everything they can to provide adjustments where they normally would not to help keep small business owners afloat.

Get more answers to small business insurance questions here.

Business Interruption, which is often part of small business insurance policies, covers revenue losses in case of a disaster, specifically, if the damage of physical assets such as machinery or vehicles are cause for a loss of revenue. There is a lot of fine print and exclusions involved with Business Interruption, and it does not include income loss due to a pause in business caused by COVID-19.

Loss of Use coverage for commercial vehicles generally says that if you use a vehicle to generate income for your business and you can no longer use that vehicle, you can file a claim for that loss. Unfortunately, the prevailing view at this time is that the current pandemic and the government ordered closures are excluded from Loss of Use coverage.

Do I need commercial insurance to get a Small Business Administration loan? 

Part of the loan process for any SBA or federal assistance loan is showing proof of, at a minimum, general liability coverage. If your business isn’t currently protected by a commercial insurance policy, it’s worthwhile to contact a licensed insurance agent to make sure your livelihood is protected.

Home Insurance

Now that I’m spending more time in my home, do I need to rethink my insurance coverage?

Now is a perfect opportunity to review your assets and to make sure your home or renters insurance covers those assets appropriately, said Jodi DeSantis, managing director of insurance sales.

Normal home insurance will give you coverage for the property itself (house, garage, etc.) and personal property. But home insurance policies generally come with some limitations. Expensive items such as such as jewelry may benefit from additional coverage. It may make sense to add those items to ensure you are fully protected if something were to happen.

Give your insurance agent a call and they will search for missing discounts or opportunities to save.

“We would love to review [members’] policies for additional discounts to provide a cost savings. If they haven’t reviewed their policy with an agent recently, they may not be getting the best value we have to offer,” said Scott Richards, regional manager of insurance sales in Rhode Island.

Being underinsured could be disastrous. Richards provided an example of when many members lost power during a recent storm and the outage lasted for several days. “Refrigerated food spoilage coverage is an important coverage that many members may not have on their policy. Basically, it covers the cost to replace the items in your fridge if the power goes out.”

These days many people are also working from home. The insurance team encourages everyone to work safe; check all connections to ensure they are secure; use power surge strips and make sure that all wires and cables are out of the way so that family members will not trip and fall.

travel insurance

Travel Insurance

Many travelers had to cancel, postpone or cut trips short because of COVID-19.

Most travel protection plans exclude losses caused directly or indirectly by an epidemic, as in the case of COVID-19. Once a health alert is issued it is considered a “known event” and excluded from coverage. Check cdc.gov/travel for all warning and alerts.

As a rule, to get the most protection possible, widen your coverage window by purchasing insurance as soon as you place your initial deposit or payment for vacation.

See how travel insurance can protect you in various scenarios. 

Special Event Insurance

Does an existing special event policy cover cancelations resulting from COVID-19? Should it be considered in the future in case of a similar crisis

If you had a special event policy in place before COVID-19 was defined an epidemic, then your policy would pay lost deposits if your event needed to be canceled. The policy could also be canceled flat or the effective date could be moved further into the future. Companies are being extremely flexible about refunds in this situation, but cancelation coverage is currently unavailable for purchase.

Learn more about how special event insurance can protect you from unforeseen circumstances.

fun money saving tips

Discounts & Savings

Money is tight right now. Are there more ways that I can save money on my Insurance?

There are plenty of discounts that insureds can take advantage of.


“Members who pay their homeowner insurance via an escrow with the mortgage company, often think they can’t switch, or it would be too difficult.  That’s not the case at all and our agents can walk you through the process and make it easier,” said Eng. “In addition, renters don’t realize how much they can save bundling a renters policy with auto.  It’s not uncommon that the renters policy becomes essentially free or the discount on the auto is greater than the cost of the renters policy.”

Many insurance companies will provide greater savings if you have multiple policies. You can save by bundling auto and home policies, but can often save even more if you add an umbrella or life insurance policy.

Good Student

With more students coming back home, this can be a good opportunity to save on your auto policy. If your child gets a B or higher, they will likely qualify for a good student discount. This usually requires that you send in a transcript as proof to obtain the discount.

AAA Membership

Did you know that you could get a discount on your auto policy – and maybe your life or business insurance policy – just for being a AAA member? It’s true! Check with a AAA Insurance agent to see how much you could save on your policy.

Centrally Monitored Alarm Systems

With all the DIY systems available, many homeowners are installing their own alarm systems. If the system is centrally monitored by a service (i.e. the alarm notifies the police or fire department), there is typically a discount on your homeowners policy.

Advance Purchase Discount

This is not as commonly known, but many auto and home insurance providers will offer a discount for shoppers if they can purchase their policy five to seven days before the policy becomes effective.

User Based Insurance

User based insurance is essentially “pay as you drive” and rewards good driving behavior. Many auto insurance companies offer a discount when you sign up for user based insurance.

Defensive Driving Course

Depending on your state and insurance company, you can qualify for an auto insurance discount and license point reduction when you take the AAA Defensive Driving Course. Best of all, you can still save while social distancing. Take the course online and you will receive the same benefits from the safety of your home.

Insurance Terms Explained

If you need help understanding insurance lingo, we break down insurance jargon from A to Z.

Ask an Insurance Pro

Submit a question for a AAA Insurance expert below, or schedule an appointment with an agent at a time that is convenient for you.   

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