Car insurance firms told to ‘act reasonably’ in lockdown amid fears claims will be axed
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Car insurance firms have been warned by the Financial Conduct Authority to take a reasonable approach to claims even if road users are breaking lockdown rules. However, the experts still confirmed that making a non-essential journey could be outside of drivers “terms” which could see agreements axed.
They have urged road users to check their policy to ensure they are properly protected” before heading out for a journey.
Speaking to Express.co.uk, Lee Griffin, CEO and founder of Go Compare urged drivers to check their terms and conditions as soon as possible.
He said: “Taking a non-essential journey during lockdown could be outside of the terms of your car insurance policy and so could invalidate your insurance.
“But insurers have been given guidance by the Financial Conduct Authority (FCA) stating that it expects insurers to act reasonably when deciding whether or not to reject a claim made because of driving during lockdown.
“To avoid any issues the important thing for drivers, as always, is to check the terms and conditions of your policy before taking a journey that you are unsure of, to make sure you are properly protected should you need to make a claim.”
Back in March the FCA said they expected insurers to “take account of a customer’s temporary change” in circumstances.
They urged forms to treat customers “fairly” and did not expect forks to “void policies or reduce potential claims” as a result of the pandemic.
Go Compare’s comments come just a day after a range of experts warned policies could be axed if road users travel under the shutdown.
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This is because breaking the restrictions would be considered as breaking a driving rule which is against many agreements for road safety purposes.
Motoring lawyer Nick Freeman said: “Essential travel is largely defined as shopping for necessities, picking up medical supplies, caring for a vulnerable person and getting to and from work if you cannot do so from home.
“Anything else is not really acceptable. If you have an accident and you cannot prove your journey was essential, your insurance may be void.”
Invalidating your car insurance can have major consequences with road users who are unable to legally use their vehicle until some new cover is sorted.
Breaking this rule and using your vehicle anyway could result in a £300 fine and six penalty points while in some cases cars can be seized.
Penalties can also be issued for simply parking an uninsured car on a public road which could catch out thousands of drivers who leave their car directly outside their homes.
Drivers will also need to pay for any claims or car damage picked up while they are not insured in another major cost throughout the winter.
Road users who have invalidated their first agreement may find it difficult to obtain a new policy at a competitive price.
This is because many firms add you to a blacklist due to your higher perceived risk as a customer.
John Neill, spokesperson for Castle Insurance Services said: “If it’s a non-essential journey and being used outside the terms of the policy then there may be grounds for an insurer to reject a claim.”
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