Car Insurance during the Coronavirus Pandemic: What you need to know

By Staff Reporter - 18 May 2020

Expert Voices

The coronavirus has impacted almost every industry in some way shape or form. The insurance sector is also having to adjust and changes have been made to protect policy holders.

Millions of cars across the country are parked on driveways and roads during the lockdown, whilst others have become essential in helping key workers and those who are vulnerable get to where they need to be. Many motorists may be asking themselves if they need to inform their insurer about any changes due to COVID-19. We hope to provide some clarity on a range of frequently asked questions.

As the number of cars on the roads have decreased, the overall risk factor has also decreased significantly for insurance companies. This can be easily verified by comparing car insurance from Premiums have been slashed in price, and many firms are even offering drivers with existing policies a partial refund due to this.

Do I need to contact my insurance provider to update my policy because of COVID-19?

Insurance firms have introduced additional support for any driver that has been affected by the global virus. These changes will remain in place until either travel restrictions are lifted or July 31st 2020 – whichever takes place first.

This means that if you do have a private car insurance policy, you do not need to amend your cover or inform your insurer.

What if I’ve purchased new cover and my use case has changed?

The above applies to both new and existing customers. Any new insurance application should reflect usage during normal day to day routines. You don’t need to specify how your vehicle will be used under lockdown rules. Furthermore, once restrictions have been lifted, you will still have the right type of cover without any changes to your premium.

I’m self-isolating, can someone else use my car to purchase essential shopping for me?

Anyone who is helping you buy your essential shopping will need to have their own comprehensive car insurance policy which includes a ‘driving other cars’ (DOC) clause. This will allow them to drive your car, should they need to. It’s worth noting that this will only cover them on a third-party basis, meaning any damage to your vehicle will not be covered.

According to the AA site, if there is no DOC clause in place, you will need to contact your insurance company and add them to your policy temporarily. You may be expected to pay a small admin fee (normally between £15 and £40). If you would like your vehicle to be covered too, the additional person will need to be included as a named driver. Check with your insurer to see how your total premium will be affected.

I’m no longer using my vehicle; should I cancel my policy?

Before doing this, you’ll need to register your vehicle off road by applying for a SORN. If you don’t, by law you will need valid cover. You can’t just suspend your policy during lockdown because the vehicle is not in use.

Once you have declared your vehicle as SORN due to coronavirus, you can contact your current insurer to cancel the policy. Some companies are even waiving any administration and cancellation fees for this.

If claim numbers are down, why are premiums still high?

Insurance premiums are normally based on a company’s previous financial performance. However, a number of firms are making goodwill gestures to benefit their customers. For example, Admiral Group which covers Admiral, Bell, Diamond and Elephant are awarding their car and van insurance policy holders with an automatic £25 refund.

As long as cover was in place before 20th April 2020, the rebate will apply automatically, meaning customers do not need to take any action. Hopefully other car insurers follow suit and follow Admiral’s lead.

What if I can no longer afford my insurance payments?

For anyone whose car insurance premium is due, it may be worth switching to a monthly direct debit payment method. Although this may be 10% to 15% more expensive, it can help ease cash flow in the immediate short term.

If you already pay via monthly direct debit and are still struggling, you should contact your current provider as soon as possible to see what options are available. Remember it is illegal to drive on a public road without the appropriate cover.

It’s also worth noting that although the UK government has not provided direct assistance for insurance payments, a number of financial measures have been set out to help those impacted by the coronavirus.

This pandemic will have a great impact on both drivers and car insurance companies. Ultimately, it’s important to remain optimistic that things will return to ‘normal’ as soon as possible. Generally, the same rules apply, road safety should always be a top priority and support is available for those that need it.

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