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LV= reveals coronavirus car insurance refund – is it enough?

LV= reveals coronavirus car insurance refund – is it enough? | Insurance Business

LV= reveals coronavirus car insurance refund – is it enough?

Pressure has been mounting on car insurers across the UK to offer car insurance premium refunds, similar to those being presented in the US by giants such as Allstate, Progressive and State Farm. Admiral was the first to take significant action – offering a flat rate refund to its customers of £25. Now, LV= has put forward its own offering.

The insurer is offering both car insurance and motorbike insurance refunds – with the rate ranging from £20 to £50. However, there is a catch – you will only be eligible for the refund if you have felt the financial impact of the coronavirus in certain ways.

According to LV=, it is making £30 million available for refunds as it expects to pay a reduced number of claims during this time. However, to be eligible you must fit into one of these categories:

  • You must have been made unemployed at some point since March 01, 2020. Or…
  • You must have been furloughed but haven’t received money via the Coronavirus Job Retention Scheme. Or…
  • You must be self-employed and unable to work or trade due to COVID-19 and haven’t yet received money through the Self-employment Income Support Scheme.

“Right now, there are millions of families across the UK who are facing unforeseen pressures on their finances as a result of coronavirus,” said CEO Steve Treloar. “Our research shows that a third of people with motor insurance are currently concerned that they will struggle to pay bills such as insurance premiums over the next three to six months with 1 in 10 saying they are very concerned at their ability to do so. 

“So, we believe it’s vital and the right thing to do to concentrate the additional financial support we can offer on those who are really struggling. “We spent a lot of time thinking about the best way to help customers and this enables us to give between £20 and £50, which to some families will make a real difference. In taking this approach, we can do more for those who need help the most.”

However, LV=’s approach has come in for some criticism, particularly with Admiral choosing to refund the larger total sum of £110 million.

“While another major insurer, LV, offering refunds to customers is a good thing - what they are offering is actually a step down from Admiral’s support,” said By Miles CEO James Blackham.

“While Admiral gave an automatic £25 refund to all customers, LV is only offering refunds of between £20 - £50, but only to those who can prove they are financially worse off due to coronavirus. And they’re making policyholders do the leg work - asking drivers to contact them directly to apply for a rebate. 

“We hope this is just the first step, and LV= is prioritising customers who’ve experienced financial difficulties before offering refunds to all their drivers who have not been getting their money’s worth from their policy. Those who are driving less, you should pay less. It’s as simple as that. Any customers who are looking for refunds from their insurer (if they haven’t been already) should contact their insurers and make this point.”

LV= does highlight that even if you are not eligible for a refund because of your financial situation it is possible to temporarily change the level of cover you have – such as reducing it to fire and theft cover if you don’t intend to use the vehicle during this time. It is also not charging administration or cancellation fees, and is waiving excesses for those in financial hardship during this period.