Coronavirus: Can I get a refund on my car insurance?

Published 23 April 2020

Admiral has announced that a £25 refund will be automatically given to all customers for each car and van covered with its vehicle insurance, which is a total of 4.4 million vehicles.

The news comes after insurers were accused of profiteering by customers that are staying at home and driving less during the UK wide Covid-19 lockdown, but haven't seen reduced premiums to reflect the change in driving habits.

Customers don’t have to take any action to receive the refund, it will automatically be credited to them by the end of May.

Below, we've rounded up what the UK's biggest insurers told us they were doing in response to coronavirus and the countrywide lockdown.

Can I get a refund during lockdown? 

1Can I get a refund from my insurer?

The answers varied between insurers. Here's a roundup of what they said:

Direct Line told us that if a driver believes that their mileage will be a lot lower than originally estimated at the start of their annual policy, they can get in contact. "As long as you’re reducing mileage by at least 1000 miles per year and customers are not already on a particularly low estimated annual mileage, a refund will generally be available."

AXA says is has flexible cancellation policies and support for financially vulnerable policyholders who may be struggling to pay their bills. "AXA also underwrites By Miles, the UK’s first pay-by-mile car insurance provider. Through By Miles, thousands of drivers have been given the flexibility to save while lockdown continues."

Aviva says customers who are driving significantly less can review their annual mileage and make changes to this if they feel it will be significantly reduced. Customers who pay monthly may have their outstanding premium reduced, while annual customers may receive a refund. 

NFU Mutual told us it's offering midterm adjustments. "For instance, a reduction in mileage or wanting to cancel their policy, we can offer either a midterm adjustment or a midterm cancellation which unlike many of our competitors, we offer free of charge. For midterm adjustments the changes come into effect immediately. The full premium difference will be refunded if the customer pays annually, or if the customer pays by monthly direct debit (which we offer with a 0% service charge) the monthly payments will be reduced."

"We [also] expect to provide £250m worth of premium discounts to customers who renew between July 2020 and June 2021, and our Mutual Bonus has already saved our loyal customers £820m in premiums during the past five years. This approach also avoids the extra costs involved in administering large numbers of refunds."

"Customers who are not currently using their vehicles and would like to formally take them off the road through a SORN (Statutory Off Road Notification) are able to cancel their NFU Mutual insurance with immediate effect. This is known as a midterm cancellation and unlike many of our competitors, we offer these free of charge. At the time of cancellation, a refund of premium for the remaining, unused term of the insurance will be issued to the customer."

Ageas says "We’re continuously reviewing our customer proposition to ensure we can reasonable adapt to best meet their needs. In anticipation of customers travelling less, we can confirm that we have already reduced our pricing to reflect the current situation."

RSA says it's waiving all fees and charges for any coronavirus-related changes customers make to their car insurance. "We are giving customers the option to update their policies to reflect their current usage and potentially lower their premium, however it is too early to say how the lockdown may affect claims, and the impact this has on premiums overall."

2Can I defer my insurance payments?

A few vehicle insurers mentioned deferred payments. Here's what they told us about what they're offering.

Direct Line told us that it may defer payments. "But we encourage customers to call us directly to speak with us about their financial difficulty and which option will be best suited."

"If a customer does defer their payments, we will not charge them any additional interest payment, the remainder of their instalment plan will just be spread across the rest of their monthly instalments. As the payment is only deferred, the customer’s policy and cover remains the same." 

RSA said,"If customers are struggling financially due to COVID-19, we are giving them the option to defer their monthly premiums. This means customers would be able to defer their premiums one month at a time, for up to three months."

Aviva is providing up to three months of payment deferrals for those experiencing severe financial hardship as a result of coronavirus.

3Am I still insurered to use my car during the lockdown?

Yes.

HonestJohn.co.uk's advice is not to cancel your insurance just because your car isn't being used right now. We would keep the insurance running otherwise you'll be liable for any potential theft or damage. If the car is off the public road (in a garage or on your driveway), you can put it on SORN and get a refund on the road tax VED.

If the car is on the road, you will need to keep it taxed and insured. You cannot SORN a car on a public road as it's technically an offence.

Many insurers are also working with customers to extend cover for key workers and those who are volunteering during the outbreak. In that regard, ensure that you've discussed the different ways you may be using your car (volunteering, less use, more use etc) at the current time. If not, your insurance could be voided.

Ask HJ

I risk going over my mileage allowance. Can that invalidate my car insurance?

If i go over my declared mileage, does that invalidate the insurance policy?
Yes, it can do if massively in excess. Alternatively, the insurer may charge an additional premium or may pay a claim based on proportionality, i.e. they may not pay out in full, but only a proportion of what they would have paid had they have known about the additional mileage.
Answered by Tim Kelly
More Questions
Ask HJ

Can insurance be voided if an accident happens while undertaking a non-essential journey?

My sister and brother-in-law, who are both in their eighties, are insistent on driving into the countryside on non-essential journeys. Would this nullify their car insurance if they had to claim?
It wouldn't nullify their insurance. But they are increasing the risk to other people, for example, if they break down or cause an accident and emergency services has to attend. Plus, the increased risk to more rural villages that they may be bringing by visiting and going for walks. The Government line is clear: stay at home.
Answered by Tim Kelly
More Questions

Comments

MarianPenny    on 27 April 2020

My insurer (Saga) has actually PUT UP my insurance - by nealry 40%. And no, I have not had any accidents or claims, in fact I used the car very little the past year even before isolation! It was a huge shock when I had my renewal :(

Roger Hulme    on 27 April 2020

I am 73 but haven't found Saga - or other companies which do policies for the elderly - to be competitive for many years.

The last time I was insured with Saga I got a good price which was hiked after 12 months. Needless to say I went elsewhere. There is no reward for loyalty - that is why I shop around annual for Insurance, Gas, Electricity etc., and use a cashback site.

Living near Manchester I have found Aviva, Quotemehappy and LV to be competitive.

Look at Moneysavingexpert.com too.

Victor Ahiaba    on 29 April 2020

Indeed, no reward for loyalty at all!

JRZ    on 27 April 2020

I had the same on my Saga House n Contents Insurance last year from £82 up to £156 needless to say within half an hour I got exactly the same cover with another company for £82
I had my yearly 3 months in OZ Saga travel insurance which is quite expensive anyway being in my 70's they tried the same with that I'm now saving nearly £90 elsewhere
Car policy due in July l wonder what wonderful renewal prices they think I will put up with I'm guessing I shall be booting Saga out...

Mike Mckay    on 27 April 2020

I am at my wits end over the current situation

I am a cancer survivor and due to the speed at which the type of cancer I have can reassert itself (fine to dead in less than 24 hours) my car has felt like a lifeline as the symptoms arent unique and arent always obvious

When I came to renew my insurance this year for the first time ever I was asked for my driving licence number, when I gave it to them they said there was a problem, on contacting the DVLA they informed me they revoked my licence in 2003 but couldnt tell me why as documents that old hadn't been digitised

I had a 3 point speeding ticket around then, but was offered and attended a speed awareness course and therefore didnt have to have points added to my licence (I still have the paper version)

they said it wasnt a major problem, and if I sent in my birth certificate, proof of my NI number, a photo and my licence it would take about three weeks and would be unrevoked?? lol and I didnt need to retake a test or anything

That was before the lockdown, now I cant talk to them at all, I dont know whether my case is being dealt with more slowly or has just been totally shelved as it did arrive before the lockdown, but their phone lines were switched off for everyone except first line staff shortly afterwards

My insurance company has been extending my policy for a week at a time but keep saying they cant keep doing it and will have to cancel my policy at some point, which will mean I suspect much higher premiums because of having a policy "cancelled" regardless of why it was cancelled

As I have been unable to work since having my chemo I can barely afford to keep the car on the road as it is and the stress this is causing is detrimental to the immune system at best, but mine is already compromised to begin with and with this on top I am literally living in fear of my heightened risk and what this might all mean moving forwards with premiums or if I feel "ill" but an ambulance isnt available etc

I feel I have nowhere to turn, nobody I can talk to to ffind out whats going on and an insurance ccompany that might cause me to not be able to keep a car on the road after all of this and all for what appears to me a silly clerical error that was just discovered at the worst time possible

Plodding Along    on 27 April 2020

Hi Mike. Sounds like you're in a bit of a pickle. If your insuramce company are not tking any calls now because of covid I would try the Citizens Advice Bureu. Apart from that I really don't know what to suggest. Hopefully someone else will have some asvice. Just try not to worry too much. I wish you all the best for a speedy recovery.

Frederick Knott    on 28 April 2020

Mike, as a suggestion email your MP immediately asking that he/she contacts DVLA to assist.

Do not delay as your insurance company could cancel your policy at any time.

marlin333    on 28 April 2020

I believe SAGA have stopped these low first year come-ons followed by silly price hikes after all the bad press they received about it, in fact my wifes policy was renewed a couple of weeks ago as it was £1.00 only more than last year. I was expecting to start comparisons but no point as this policy offers more than most other companies for the price. So happy.

Petegeoff    on 28 April 2020

A revoked licence since 2003! Surely that would have needed renewing at some time since then.

romford4    on 30 April 2020

Mike Mckay, if you're still checking this page then definitely follow Frederick's advice of contacting your MP asap with similar content to what you posted above.
I had serious issues 8 yrs ago with the DVLA in relation to them losing HGV & PCV entitlements from my licence, costing me work. I'd spent months being passed from pillar to post, with all manner of excuses and delays. With prompt intervention from my MP's constituency office, the missing categories were magically found again.
Also ask your MP if they could contact your insurer to explain things and seek some leeway due to the unusual situation.
The intervention of an MP seems to quickly reach someone with a bit more clout and can resolve problems much faster.
All the best & I hope things work out for you, both in relation to this situation and your longer term health.

Add a comment

 

Ask Honest John

Value my car