Insurance customers set for lower premiums, payment holidays and policy adjustments
The financial watchdog confirms measures to help insurance customers who may be suffering financial hardship due to the coronavirus.
From Monday, 18 May, insurance providers should help their customers by offering payment holidays, waiving fees and lowering premiums.
The Financial Conduct Authority (FCA) has said that insurers must reassess the “risk profile” of their customers during the COVID-19 crisis and consider whether there are other products that would better suit the “customer’s needs”.
This could significantly change the price of your premium as there could be cheaper products during the coronavirus lockdown that are more suitable for you.
As an example, you would be able to reduce your estimated car mileage and usage without incurring any cancellation costs and administration fees.
Another example could be switching from a comprehensive insurance policy to a third-party policy or removing add-ons that are no longer needed such as key cover or breakdown cover.
Sheldon Mills, the interim executive director of strategy and competition at the FCA, said: “As with other areas of finance, we have worked quickly to draw up measures to help policyholders in financial difficulty because of coronavirus. The measures confirmed today will provide urgent support to those that need it.”
Several insurers are already offering some form of financial support during the coronavirus pandemic. Admiral is giving a £25 refund to all car, van and motorbike policyholders.
Other car insurance providers such as Churchill, Direct Line and Axa offer the option to adjust your mileage online.
Under the new terms, all firms should encourage their customers to get in contact if they’re experiencing financial difficulties. They should also clearly state the different options made available on their website and app and in communications.
The FCA has said that these measures will be reviewed in the next three months and revised if appropriate.