Car Insurance Premium Rebates and Renewal Premium Reductions re. COVID-19

PME4K

My wife and I emailed our respective car insurance companies, (SAGA and Aviva), about what they intended to do about offering their clients, including ourselves, both a rebate in respect of current premiums and a reduction in future annual premiums, to reflect the present situation regarding COVID-19

Please see below**

You will have experienced, just like they have in the USA (Allstate and American Family Mutual auto insurance, to name just two) a dramatic drop in accident claims as residents stay at home and off the roads. As Tom Wilson, chief executive at Allstate said, “Our clients deserve premium relief, this is fair, because less driving means fewer accidents,"

Driving mileage is, I would suggest, down between 55% and 65%. People are driving less and car insurance businesses are experiencing fewer claims. To make refunds due to a reduction in driving as more people are working from home, i.e. quieter roads equals fewer accidents and fewer claims, is the just thing to do.

Refunds and reduction in renewal premiums would come at a good time with millions of households suffering financially from lockdowns across the country. There are very few silver linings out there, but your car insurance company is certainly someone who could provide ‘some of that silver’! I simply want your company to provide all its clients, including myself, with a rebate on this year’s premium and a reduced premium for next year that reflects the increased profits your company will have made as a result the reduced number of claims you will have had to deal with, because there are fewer journeys and accidents.

In these difficult times, I think it is the only fair course of action and is in line with the actions other companies are taking, in order to be fair to their customers.

I look forward to your earliest response.

To say they weren’t interested and readily dismissed our enquiries, would not be an understatement.

Who would you recommend we take the matter up with now, in order to achieve a just and fair outcome, just like in America, given that the Association of British Car Insurers seemingly does not, ironically, deal with such matters!

[Deleted User]

You made the mistake of massively overstating your case and assuming that you knew their current claim rate and cost structure.

Such an assumptive approach was never destined to go well.


Probably best to leave it there. 

Jumblebumble

PME4K said:

My wife and I emailed our respective car insurance companies, (SAGA and Aviva), about what they intended to do about offering their clients, including ourselves, both a rebate in respect of current premiums and a reduction in future annual premiums, to reflect the present situation regarding COVID-19

Please see below**

You will have experienced, just like they have in the USA (Allstate and American Family Mutual auto insurance, to name just two) a dramatic drop in accident claims as residents stay at home and off the roads. As Tom Wilson, chief executive at Allstate said, “Our clients deserve premium relief, this is fair, because less driving means fewer accidents,"

Driving mileage is, I would suggest, down between 55% and 65%. People are driving less and car insurance businesses are experiencing fewer claims. To make refunds due to a reduction in driving as more people are working from home, i.e. quieter roads equals fewer accidents and fewer claims, is the just thing to do.

Refunds and reduction in renewal premiums would come at a good time with millions of households suffering financially from lockdowns across the country. There are very few silver linings out there, but your car insurance company is certainly someone who could provide ‘some of that silver’! I simply want your company to provide all its clients, including myself, with a rebate on this year’s premium and a reduced premium for next year that reflects the increased profits your company will have made as a result the reduced number of claims you will have had to deal with, because there are fewer journeys and accidents.

In these difficult times, I think it is the only fair course of action and is in line with the actions other companies are taking, in order to be fair to their customers.

I look forward to your earliest response.

To say they weren’t interested and readily dismissed our enquiries, would not be an understatement.

Who would you recommend we take the matter up with now, in order to achieve a just and fair outcome, just like in America, given that the Association of British Car Insurers seemingly does not, ironically, deal with such matters!

Insurance does not work like this.
Any "taking this up" will  end up in your complaint being filed in the circular filing cabinet
If you had travel insurance and the company wrote to you saying that as a result of Covid19 they were paying out far more on claims than anticipated  and could you send in some extra premium to cover this  what would your reaction be ?

dunstonh

To say they weren’t interested and readily dismissed our enquiries, would not be an understatement.

The insurers have closed their call centres and staff are working from home.  The people answering your emails are not decision makers or even in a position to understand the workings of premiums.   You effectively just created work at a time when workloads are high due to reduced staffing and took a member of staff away from helping someone in genuine need.

Admiral gave a £25 reduction on all policies.  They couldnt reduce on a case by case basis as it would be too expensive to work it out (more expensive than the total cost of giving everyone £25).  The insurer has no way of knowing whether you are doing 50% less, 90% less or the same as normal.  So, a blanket tiny discount for everyone is what they went for.  

I simply want your company to provide all its clients, including myself, with a rebate on this year’s premium and a reduced premium for next year that reflects the increased profits your company will have made as a result the reduced number of claims you will have had to deal with, because there are fewer journeys and accidents.

What makes you think that they will have increased profit?.  Car insurance is frequently loss-making (arranging and insuring being different things).   Over the next year claims could significantly rise.  Thefts are likely to increase (always do when the economy is in decline).  Vandalism could increase and as the country returns to work and plays catch up, people could actually use their vehicles more.     You should not underestimate the significant costs that the insurers have in getting staff able to work from home and the loss of new business as staff and brokers are not necessarily in place to deal with it.  

I would not be surprised to see a few of the larger brands follow admiral in giving £10-£25 back as its good marketing.   However, you should not assume you know their business model better than they do.  Indeed, there are reports in the media today that car insurance thefts have gone up during lockdown by as much as 60%.

rs65

PME4K said:

given that the Association of British Car Insurers seemingly does not, ironically, deal with such matters!

Never heard of them.  Got a link to their website?

lagib

Contacted my car insurance provider (Ageas) about their policy on giving a rebate on my premium. This due to Covid-19 lockdown and subsequent reduction in car use I/e my usage has fallen from around 9000 per year to less than 1000. They said their policy is only to give a refund if the car is taken off the road altogether. No sympathy from Ageas then for the reduced risk of driving less miles in a year.    

dunstonh

Contacted my car insurance provider (Ageas) about their policy on giving a rebate on my premium. This due to Covid-19 lockdown and subsequent reduction in car use I/e my usage has fallen from around 9000 per year to less than 1000.

Lockdown is only going to be around 2 months (traffic is already increasing again).   So, how do you drop from 9000 to under 1000 with 2/12ths of the time on reduced driving?

Ditzy_Mitzy

Well... 
Firstly the car is still insured. You've bought the insurance and it remains in place should you wish to drive it. It also might prove handy if the car was stolen, crashed into whilst parked or if it spontaneously burst into flames. 
Secondly - why on Earth would the insurer discount next year's premium, when you will be using the car as normal? Assuming the lockdown has ended, which we hope it will have done.

Nebulous2

dunstonh said: 

Admiral gave a £25 reduction on all policies.  They couldnt reduce on a case by case basis as it would be too expensive to work it out (more expensive than the total cost of giving everyone £25).  The insurer has no way of knowing whether you are doing 50% less, 90% less or the same as normal.  So, a blanket tiny discount for everyone is what they went for.   

It’s all a matter of perspective. I’m less than £200 a year for a modest sized car and 18000 miles. £25 would be a decent result for me - not a ‘tiny discount.’ 

Thrugelmir

Admiral gave the £25 as a PR exercise. Customer service has struggled apparently. 

NeilSJ

Good Morning
Just came across this old thread, and no doubt there are others like it. I guess we have all come to accept that the insurance companies are not interested in giving out rebates because of COVID. 
However, there is still the opportunity to save money going forwards, by reducing the projected annual mileage on your insurance renewals. Since lockdown, and a long term shift in working patterns brought about by the experience of working from home during the pandemic, my own mileage estimate for the next 12 months is about 6,000 miles down on what it used to be (much reduced commuting). I have just renewed my annual car insurance policy and got a reduction of around 50% on the premium from this factor alone.
It stands to reason motor insurance would be cheaper the less time you spend on the road.  It wasn't until the customer services agent at my insurer hinted at this on our renewal call that the penny dropped. 
I haven't seen this "tip" mentioned in the MSE newsletters, so if Martin has already covered it then apologies.