Car insurance refunds: More could be offered to ‘better reflect’ car journeys in lockdown
Car insurance refunds and payment deferrals have been offered by a selection of firms after mounting pressure. The move came after firms in the US began offering large discounts and money-back schemes to motorists for not using their car under lockdown.
- Car insurance refund available at this firm
However, motoring experts Cuvva have hinted more is needed to ensure offerings meet individual needs.
Insurance providers in a number of countries have started offering customers rebates that more fairly align with their actual vehicle use over the period.
Cuvva is calling for a further payment delay across the next two months to better reflect the lack of journeys being made.
Founder, Freedy Mcnamara said: “No doubt this is a step in the right direction, but a one month premium holiday split over the months of April and May would more accurately reflect motor usage during lockdown and extended periods of isolation.
“Motor insurance incumbents could make as much as £1billion in profits from a reduction in claims of up to 50 percent.
“It’s only fair that those funds are returned to customers automatically, in line with individual policies.”
In the standout saving, Admiral Insurance are offering all drivers £25 for free in a scheme worth a total of £110million.
Admiral says this equates to the same as one month’s total premium profit to highlight how the firm is aiming to pass over savings to customers.
Car insurance companies could make £1billion by not offering refunds [ANALYSIS]
Car insurance companies will protect customers [ANALYSIS]
Insurance firms will not invalidate cover for these reasons [COMMENT]
Other firms have also promised a range of methods such as offering payment deferrals and waiving excess fees for those with financial worries.
The Association of British Insurers (ABI) has also confirmed insurance firms will offer extended cover for many key workers and volunteers.
This means motorists will be able to use their car to travel outside of their normal class of use and will not run the risk of having a policy invalidated.
However, only Admiral are yet to offer a money-back scheme for motorists with other firms so far failing to offer any financial measures.
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Admiral CEO Cristina Nestares said the scheme was launched to recognise the efforts people were making by staying at home.
They said the firm wanted to give the money they would have used to payout on claims over the period to customers as the firm did not want to profit from the crisis.
Insurance analysts Tempocover said the £25 offering was a “step forward” and would make a “measurable difference to drivers”.
Tempcover said they had noticed a 38 percent rise in motorists interested in getting a statutory off-road notification (SORN) due to the uncertainty of the situation.
This shows more motorists are deciding to give up their right to drive their car in order to avoid heavy car insurance costs.
Tempcover has urged insurance claims to look at temporary vehicle insurance which could provide “peace of mind” to many.
These policies allow drivers to take out cover from just one hour to 28 days so may be ideal for those using cars more infrequently.
Just days ago, ByMiles CEO James Blackham said insurance holders must be able to request a premium reduction amid the crisis.
Mr Blackham said insurance firms also needed to add extra months to their policy to ensure motorists were treated fairly.
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