Only a fifth of drivers have received an insurance premium refund – Which?

Only around a fifth of drivers have received any premium refund from their car insurer due to the coronavirus restrictions, Which? has found.

This is despite nearly half of motorists drastically reducing their mileage.

The consumer group surveyed more than 2,300 people with either car, home or private medical insurance about the impact that Covid-19 had on their cover and found that motorists were most likely to feel their policy had lost value.

Around half (49%) of car insurance customers in the survey had seen a major decrease in their annual mileage, but only a fraction told their insurer or saw any premium refund as a result.

Which? found that only around a fifth (21%) of car insurance customers have had some of their premium repaid.

Some drivers felt they were paying over the odds for their cover, given how little they drove during lockdown.

One customer told Which?: “I did 40 miles from March to July.”

The survey also revealed that one in seven (14%) car and home insurance customers have struggled with their premiums in the pandemic, as have nearly three in 10 (29%) private medical insurance (PMI) customers.

Most struggling customers said they had received some kind of financial support from their car insurer.

Which? said Admiral stands out as having proactively given rebates to customers.

It is calling for insurers generally to do more to support customers struggling financially as a result of the pandemic by taking every step they can to engage with and help those who need it most.

Harry Rose, editor of Which? Magazine, said: “Our research shows that many insurance customers are struggling with their premiums as a result of the pandemic, but up to a quarter of these people have received no support whatsoever.”

The Association of British Insurers (ABI) said its motor premium tracker shows that the average cost of comprehensive motor insurance is at a four-year low of £460. It also said that underlying cost pressures for insurers remain, such as the increasing cost of vehicle repairs.

The ABI said in a statement: “Our data from ABI members shows that, during the first national lockdown, the value of the average claim paid rose by 27%, despite fewer claims.”

The statement continued: “During lockdown, it is true that many motorists have used their vehicles less. However, drivers are legally obligated to have insurance for when they do drive as well as to protect against the risks of theft and damage.

“Insurers have and continue to give extra support to motorists given the exceptional circumstances, including automatically covering those using their vehicle for community volunteering, commuting to work, as well as helping those worried about being able to continue paying their premiums by instalments.

“Any premium adjustments or refunds will be a matter for individual insurers.”