Comprehensive coverage can be a mentally exhausting and expensive undertaking. In addition to liability insurance, collision insurance, and collision coverage, one needs to acquire a comprehensive insurance policy covering car accidents, car theft, vandalism, and natural disasters like earthquakes, floods, tornadoes, and hurricanes.
Even with comprehensive insurance, the customer still has to account for deductibles, comprehensive deductibles, and, of course, premiums. What about the cryptocurrency question. Even if your car insurance policy and insurance provider accept payments in cryptocurrency, is it a good idea to pay in cryptos?
Some auto insurers like USAA also act as crypto-friendly banks. Also, most insurance providers accept credit card payments, and major credit card companies like Visa accept payments in Ethereum and other cryptocurrencies.
Crypto Coverage vs. Fiat Currency Coverage
If you like at sites like CryptoVantage, you should have a good idea of where the market is at right now. Spring ended with a crypto crash, with major cryptocurrencies like Bitcoin, Litecoin, and Ethereum suffering a 50% correction. Fear and uncertainty grip the market. Was this just a crash to give whales like Elon Musk the opportunity to buy Bitcoin and other cryptos on the cheap, or is this end of the bull market? Will Bitcoin and Ethereum recover their ATH (all-time highs) in the next couple of months, or are we entering a bear market that can last for the next couple of years?
These are questions for cryptocurrency investors and traders. A question auto insurance policyholders is how do events in the crypto affect your insurance company or the value of your car? The thing to remember is that the value of the digital currency fluctuates. If an insurance company had been accepting payments in Bitcoin or Ethereum before the crash, those payments have just had their values reduced by 50%. How does that affect you, as a customer, if your insurance provider is losing money at such a rate?
The other possibility is that this is not the beginning of a long bear market. What if this crash has hit bottom, and it is the beginning of a long, bull run? How is that going to affect your relationship with your insurance providers? Sounds good, right?
Well, let’s say that Ethereum explodes and climbs past its ATH (all-time high) to $8000 or even $10,000 per coin, just like financial analyst Megan Kaspar said it would. Is an insurance provider like Geico going to want to accept payment in Ethereum at a value of $10,000 per coin, knowing that at the bottom of this crash to date, they could have bought Ethereum at $2,000 per coin? Obviously, speculative instruments like large-cap cryptos in the cryptocurrency market have a long way to fall when they are at their ATH (all-time highs). It’s strange when such instruments are used as “money.” Would you want your paycheck to be in Ethereum only to have your paycheck “correct” at 50%? Do you think your landlord would be so understanding if you told him or her about the Great Crypto Crash of 2021?
The auto insurers can, of course, reverse their position and stop accepting payments in cryptocurrencies. That is just what Tesla did, which caused this current crypto crash in the first place. Tesla’s brand may suffer from this as Elon Musk will probably get full credit for causing the Great Crypto Crash of 2021. Auto insurers and other insurance providers may have to ask themselves if they want to be put in the same position as Tesla should they suddenly do a “180” and refuse to accept cryptocurrency payments.
Unfortunately, this may be a “Damned if you do, damned if you don’t” situation for auto insurers and other insurance providers. Only time will tell.
