Coronavirus: Car insurers urged to refund UK drivers stuck in lockdown

Published 09 April 2020

Car insurers in the UK are being urged to review their rates and refund drivers who are stuck at home during the coronavirus lockdown.

Data from the Department for Transport (DfT) has shown a significant decrease in motor vehicle usage over the past few weeks, with official figures revealing a decline of over 60 per cent since the lockdown started on 23 March.

The DfT data has prompted some within the industry to ask why insurers are not doing more to help their customers.

"Everyone is forced to make changes in this situation - and that should include car insurers," said James Blackham, CEO of pay-by-mile car insurance provider By Miles.

"As people are driving far fewer miles while in lockdown, the number of insurance claims due to accidents also decreases - and those savings should be passed on to the public.

"If you’re not using your car as much as usual during this health crisis, then it’s only fair that you should pay less for your car insurance," added Blackham.

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Car owners have complained to HonestJohn.co.uk via Ask HJ that they are now forced to pay for policies for cars they can no longer use, while refunds are diminished by expensive cancellation fees. 

Research from By Miles has suggested the coronavirus lockdown could benefit car insurers in excess of £1 billion from the reduction in claims in the long term; however, comparethemarket.com has defended the industry and said many important steps have already been taken to help customers.  

“With the majority of the nation’s cars not in use at the moment, many people will be asking their insurers what they’re doing to support their customers during this difficult time," said Dan Hutson, head of motor insurance, at comparethemarket.com.

"Insurers are already making steps to support their customers via extended cancelation periods, the scrapping of admin fees and offering free bolt-on products and services to the NHS and key workers."

The Association of British insurers (ABI) also defended the industry, saying motor insurers are being "as flexible as possible" to help customers.

The ABI also said insurers had done a lot of work to ensure drivers were automatically covered for voluntary purposes to transport medicines or groceries to support others who are impacted by COVID-19.

Comments

C. Harris    on 11 April 2020

I have put my cars on SORN and on private land. Can the insurance industry be persuaded to extend the ins. year by the no. of months on SORN or allow cacellation of policy without penalty?

Scot5    on 12 April 2020

To date we're 3 weeks in to lock down. How many people seek a refund when they leave their car at home whilst jetting off on holiday?

Even if it's sitting on private land, more's the fool anyone who owns a car and doesn't insure it.

hissingsid    on 13 April 2020

I am over 70 and live in a rural area, so my cars are still in use for journeys to the supermarket and the pharmacy.
The insurance companies always cite the cost of meeting claims to justify increasing premiums, so they should now pass on at least part of the savings from the reduction in claims to their policy holders at renewal. They cannot have it both ways, but I expect that they will try.

Mark Beesley    on 13 April 2020

Good luck with even contacting your insurance company at the moment - Admiral aren't answering the phone at all, and not responding to emails....

soldierboy 001    on 13 April 2020

I think the best way this can be sorted is that when things get back to normal that renewals of policies will reflect any savings made by lower quotes.

jchinuk    on 14 April 2020

That makes sense.

Brian Finch    on 13 April 2020

Insurance companies in the USA and some in France are rebating their policyholders by 15% due to the reduction in accident rates during the lockdown. Why can't that be done here?

GingerTom    on 15 April 2020

And you will be happy to pay it back once your mileage increases again?

Marcel Price    on 13 April 2020

Fat chance of any goodwill from the car insurance industry. They dont even payout on legitimate claims. The one i am dealing with (well known) even condone and conduct theft and fraud!!!

paul mack    on 13 April 2020

I cannot believe there is a call for Insurance Companies to offer motorists a reduction during this truly awful time in everyone’s lives.

It’s pointless to think that Insurance Companies will even blink an eye here.

Of course, they could offer EVERY motorist a REDUCTION on their next car insurance renewal?

Keith Singleton    on 13 April 2020

I think a good way of doing it would be to give 13 months cover for the price of 12, but I'm not going to hold my breath (apart from walking past people in the supermarket obviously) ??

Roy Fuller    on 13 April 2020

Surely the dramatic fall in new registrations due to coronavirus and the consequential lack of new business will be used as an excuse to increase premiums to maintain revenue. Cynical, me? Whatever gives you that idea?

C A Nicholson    on 13 April 2020

A lot of car owners could not take advantage of any refund going by how many are parked on the road not off road, even if off road it would have to be SORN as parked off road still needs tax and insurance otherwise. If you cancel insurance and it catches fire, gets stolen or vandelised you would want to claim, if it's on lease or HP I would think it's in the contract to be insured, how many would risk using car for a quick trip if not insured or SORN thinking they can get away with it. Be better to give a discount on renewal.

Jim 3601    on 14 April 2020

The price you pay for Insurance is based on many factors and usage is one part of it. Yes the vehicle would need insurance while parked on the road. As for SORN you can chose not to tax, insure or MOT the vehicle. Depends if you can cover the lose. For a vehicle on HP or costly to replace you would be better to keep the insurance/condition of the HP agreement. Tell the insurance company the vehicle is SORN you would/should pay a reduced amount, for example if you were paying monthly. Its the risk you have, a stationary vehicle parked at the rear of a property isn't going to have a crash soon. The point about this article is the fact that the insurance companies have collected all this money from premiums and people are not claiming, there is a surplus of cash in their favour (based on risk/the price paid). Difficult question/answer on how this surplus of cash is to be dished out? Renewal dates are all different, changing insurers. If they decide to 'knock' it off next year as a reduced amount; what about those that call it a day with driving. Do they get a cash refund?

Edited by Jim 3601 on 14/04/2020 at 00:45

Old.Roverboy    on 14 April 2020

I have a bone to pick with all these arguments asking for "refunds" If your car is on the road being used or not, It MUST be insured. How many people underdeclare their mileage to save a few quid or "forget" that SP30 or such... or the MOT, or the tyres, or the servicing. Nobody will force you to service your car and keep a decent amount of tread on tyres. No one will force you to MOT it or even insure it, till you get caught and it gets impounded/crushed. Too many people "WANT" what they consider is a right, but what is the administrative nightmare of processing refunds, some of which will be for minor amounts? In my case it would be about £15.50 for a full month refund and how much to process that, issue cheques postage etc. No I'm not going to ask for one. There are far more important matters to deal with at the moment. Stay safe everyone ORB

Edited by Old.Roverboy on 14/04/2020 at 09:28

GingerTom    on 15 April 2020

Well said.

shallotman    on 14 April 2020

Will the same argument be used for the road tax.

Miniman777    on 16 April 2020

Unless you’ve a car where you are paying a premium rate for road tax as the list price was £40k plus, saving £13-15 a month may not be worth it. Everyone is different, some less affluent in the current crisis so every £ helps

amn    on 14 April 2020

Given the minimal reduction in the cost of insurance for low mileage policies I would imagine you will be whistling in the wind expecting a rebate

I agree with the comment about the cost of rebates

Now insurance companies could change a habit of a lifetime and give a discount at the time of renewal and reward loyalty instead of punishing it

GingerTom    on 15 April 2020

Or you could just shop around. We are fortunate to have a lot of competition in the industry. Imagine if it was nationalised.

retiredspeedmerchant    on 14 April 2020

fell off my perch laughing! Insurance companies giving us a refund? come on, car insurance is the biggest legalised rip off going. The only ones to benefit are those who do have accidents. Insurers aren't going to give us a penny back but they are going to keep the profit and share amongst their shareholders!!

GingerTom    on 15 April 2020

True they NEVER pay claims do they. Perhaps they should just charge you as if you are aged 17 and not give you any discount for your claim free driving, age, post code etc..... Then you really would have something to moan about.

GingerTom    on 15 April 2020

I have to laugh, Have you thought about what would happen if your car was stolen vandalised or in a fire? Or perhaps that should be provided for free? Always looking for money back but how many times have you gone to your insurer money in hand and admitted you did a few more miles than planned?
Instead of playing the blame game just think about how much you are saving in fuel and unblocking the roads for the key workers who are keeping the nation going.

VWCSK    on 17 April 2020

Dick Turpin was a highway robber who never gave refunds either.

Roy Fuller    on 18 April 2020

Dick Turpin was a highway robber who never gave refunds either.

At least Dick Turpin had the decency to wear a mask!

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