01/05/2020

Covid 19 – Car insurance during lockdown FAQs

01/05/2020

Covid 19 – Car insurance during lockdown FAQs

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If you’re struggling to pay the bills and looking for ways to cut back on spending, your car might be one of the first expenses to go.

We’ve all been asked to stay at home, and unless you’re a key worker or need to drive far to the supermarket, motoring probably isn’t that high on your list of priorities.

The UK government has announced measures to help reduce costs for drivers, including the option of three-month payment breaks for those on car finance and a six-month exemption from having the MOT test.

However, no blanket announcements have been made for car insurance yet – and it’s understandable if you want to know whether it’s a viable way to claw back some of your monthly costs.

Can I cut back on my car insurance costs?

This will come down to your insurer’s policy on coronavirus, and how they’re helping customers. Have a look at their website first to check if they’ve made any special announcements in relation to coronavirus. Many companies are urging customers to go online in the first instance for assistance, as a combination of high demand and fewer staff is resulting in extremely busy phone lines and long call waiting times.

Insurers understand that coronavirus has left a lot of people spending less time on the road. Admiral, for example, took the initiative in April to refund their customers £25 each, giving back £110 million in total to those with car and van insurance policies.

However, if you don’t have a policy with Admiral, you could still save money by updating your policy details. Bear in mind, though, that you may have to be driving significantly less for it to impact over the course of the year in terms of mileage.

Do I have to pay to update my details?

The costs of making policy changes will vary between insurers, but the good news is, a lot do offer the ability to change mid-term for free.

  • Aviva – You can use their Drive App to update your mileage without calling up.
  • AXA – You can make updates to your policy online via their account pages. If the price of your premium does change, you’ll be able to see the updated costs before going ahead.
  • Direct Line – Offer the ability to make virtual updates via their website and won’t charge you for the privilege.
  • NFU Mutual – Also allow mid-policy changes without penalty.

When you’re making any changes to your car insurance policy, remember that life will change again. Whenever that happens, you may need to get back in touch with your insurer in the future to update your circumstances again.

Can I cancel my insurance if I’m not driving?

While it’s true that many of us will be driving less frequently, you can only cancel your insurance if you plan to stop driving completely and take your vehicle off-road. You’ll need somewhere safe on private land to keep your vehicle, and you most notify the DVLA by applying for a SORN.

However, cancelling your insurance policy mid-term could cost you more than you’d anticipate. You’ll probably be hit with a cancellation fee, which can vary depending on who you’re insured with, the length of your policy and how much you typically pay. What’s more, insurers don’t usually refund the final two months of a policy, so any money you were expecting back could be substantially less than you first thought.

Simply driving without insurance is never an option. If you get caught by the police, you could be handed a fixed penalty of £300 and 6 penalty points. And if your case goes to court, the fine could be unlimited. You could even be disqualified from driving.

I’m struggling to pay my premiums. What should I do?

Whatever you do, don’t just cancel your insurance. If you do cancel your Direct Debit, not only could it harm your credit rating, it could leave your car uninsured. Many insurers have options available to support customers who are struggling financially, so be sure to get in touch with yours to find out how they can help.

For instance, LV have asked customers who have been affected by coronavirus to get in touch on 0800 085 5608, saying, “We know it’s a difficult time, so we want to help you where we can.”

Direct Line, on the other hand, say, “If you’re having financial difficulties, we can review your levels of cover, change your payment dates or offer a payment deferral. We will not charge any additional interest to you so the total payable won’t increase as a result.”

I’m driving differently now. Will this affect my insurance?

After the upheaval of the past few weeks, you may not have considered how your changing circumstances could impact on your policy, but it could affect your insurance, now or after lockdown if:

  • Your employment status has changed.
  • You’re using your car differently (for work, for volunteering, for deliveries).
  • Your mileage has changed significantly.
  • Anyone else in your household needs to use the car.

Different insurers have vastly different stances on policy changes, so it’s really important to find out whether you have to advise them of changes or update your cover levels.

If you’re concerned about debt because of the Covid-19 outbreak, there’s no time like the present to deal with it. Our professional, friendly team at Carrington Dean are here to offer reassurance and free money advice at this worrying time. Get in touch today on 0808 2234 102 and get your life back on track.  

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