Post Covid Car Insurance: Facts Everyone Should be Aware Of
*This is a collaborative post
After the global pandemic had first hit the UK, nobody was sure how it would affect the insurance sector, although it did not bode well for the industry as a whole. Now that the initial phase is over and the economy is trying to get back onto its feet again, certain facts about insurance under these new circumstances have come to light. A discussion regarding those facts is necessary to make more Brits aware of what’s going on. In the brief scope of this post, we will highlight key points regarding what has and what has not changed within the car insurance segment in particular.
An Insurance Refund is Possible
Most of the world and the UK came to a practical standstill for months at a stretch. For the car insurance industry, that meant two things:
- The insurers saved no small amount of money, given that there were far fewer road accidents during that time period
- They also lost a lot of revenue, since they did not get as much new business either
From the perspective of the average citizen though, the situation raised one common question, which is whether or they are eligible for an insurance refund?
The answer is highly variable and depends mostly on which insurance company you decided to purchase your car insurance from. Nevertheless, you do have the right to call them up and ask for a refund, provided your car was sitting in its parking spot for months without any significant usage. Even if they refuse a complete refund, a discount on the premium is to be expected. In fact, most of the top insurance companies in the UK have already initiated discounts on people’s car insurance premiums, without even being asked to do so.
Now is the Best Time to Reconsider Your Options
If you manage to get a full refund, or if the tenure of your insurance has come/is coming to an end, do not renew it right away. It’s always poor financial decision to buy car insurance without comparing the quotes from various providers, but in light of the present situation, that could be an even bigger mistake. To avoid making that mistake, take a look at quotezone.co.uk to compare quotes from multiple top car insurance providers across the UK on their neutral platform. Only through comparison can you really get an estimate regarding which insurer and policy would prove to be the best deal for you, given the present circumstances.
As things stand now, some insurers are losing more money than they had saved during the lockdowns, since most customers are asking for refunds/discounts, while new revenue generation has thinned down to unprecedented lows. This presents the perfect opportunity for car owners to get true, value for money deals on their new car insurance policies.
A Difficult Situation for those Who Have Lost their Jobs
During the initial lockdowns (March – July), over 2.7 million people had lost their jobs in UK, and over 750,000 more are about to lose theirs. It is estimated that this will be a result of the government slowly retracting their furlough scheme. If you were unfortunate enough to lose your job during the Coronavirus crisis, then it might be possible for you to cancel your car insurance policy without incurring heavy fines/fees.
The logic here is that if you do not need a car to drive to work, or have the means to pay for car insurance, you should not be held liable for paying premiums. As should be common sense, do not cancel your car insurance right away without considering the following few aspects first:
- You cannot suspend your car insurance policy, so a cancellation of the policy will render your vehicle useless
- For those wondering, the car will be useless because you cannot drive around legally without car insurance
- Do not just assume that you won’t be charged any fees for the cancellation, but ask about it by calling up the insurer
- The FCA has intervened recently and has worked with providers to aid unemployed car owners
- The new standards might allow you to get a much bigger car insurance discount than you believe
- If you are not planning to sell your car, comparing car insurance policies before cancelling the present one is highly advised
- The FCA has also instructed providers to reform their ongoing plans for those who need it, so that the coverage provided is lowered, along with the premiums
It is largely expected that the UK is likely heading towards another lockdown. If that indeed happens, then things might change once again in the car insurance sector, so it would be better to keep a close eye on the news for now, before making any sudden decisions. Have you been affected? Let us know.
