The FCA (Financial Conduct Authority), the insurance industry regulator, is looking for ways to help customers who are having difficulties during the coronavirus. In fact, the FCA is concerned that insurers are receiving value for their insurance coverage. The issue is whether or not the customers are using their coverage fully or even at all during the crisis.
Issues with Car Insurance Providers
When it comes to car insurance, providers have come under criticism for their policies of refusing to refund premiums to customers who have not been driving during the lockdown, and for others who are driving fewer miles during the pandemic. Some insurers have helped their customers, while other providers have not yet taken steps to ease financial burdens caused by the virus.
It has been shown that insurance providers in other countries including the U.S., Canada and France have provided such refunds to their customers.
Financial Support for Customers
The next issue the FCA wants to cover is financial support for customers who may be having a hard time paying their premiums or meeting other financial payments.
The insurance regulatory has laid out several options for insurance providers including:
- The extension of cooling-off periods
- Payment holidays for premiums
- Suspending administration and cancellation fees
- Partial repayment of premiums, if the entire amount was paid upfront
- Relaxing charges or interest for missed payments
The FCA has also recommended that customers who are having problems making their insurance payments, due to the coronavirus, should contact their insurance providers to see if there are other options to help them during this time.
The regulatory body also wants insurance providers to review their policies to make sure customers are receiving value for their coverage. If insurers find this is not the case, then they are to take steps to find ways to help customers by possibly repaying premiums or supplying new, but comparable benefits.
These proposals are still under review but are set to come into practice by Wednesday 13 May. Discussions on other measures to ease financial issues will come into practice near the end of May.
Where to Find Assistance
If you need help now, the FCA has suggested that insurers use these proposed methods to help you during the pandemic:
1). Having trouble paying premiums: if you’re having trouble making premium payments because your income has been affected by the coronavirus, talk to your insurer and see if they will offer a payment holiday. This only applies if you make monthly premiums. Keep in mind that interest will continue to accrue during this time. Payment holidays may be from one to three months altogether.
2). Reassess coverage level: if you’re driving fewer miles during the pandemic, then contact your car insurance provider and see if they can offer a lower mileage policy, which has a lower premium than your current policy.
3). Reassessing add-ons: if you have add-ons to your car insurance coverage, and you’re not using these because you’re not driving, then contact your insurance provider about the issue. They may be able to remove the add-ons, which could reduce your car insurance premium.
4). Waive cancellation fees: in the event, you’re not able to afford your insurance coverage even with the payment holiday or reassessment of your coverage, then contact your insurer to let them know you’d like to cancel. In these circumstances, due to the coronavirus, the insurance provider should waive the cancellation and admin fees. And if you’d like to take out the insurance again at some point in the future, your insurer should not penalize you for having cancelled your policy.
5). Waive admin fees for changes in coverage level: if you’re having trouble paying your current premium, it may be helpful to change your insurance to a less expensive coverage. Some insurers charge admin fees for these changes, but the FCA is asking insurance providers to not charge you for these changes due to the pandemic.
Are You Eligible for a Payment Holiday?
You may be eligible if your financial circumstances have been changed due to the coronavirus. In this case, you’ll need to reach out for assistance, as payment holidays are not required to be offered automatically.
Insurance Policies No Longer Providing Value
As noted earlier, the FCA has asked insurers to review their policies to see if customers are receiving the value of the policies they originally paid for. For example, boiler coverage that includes servicing, which now isn’t happening. Or private medical insurance coverage that customers can no longer use because of some medical procedures being put on hold, such as surgeries or seeing specialists.
In these instances, insurers are being asked to see if they can provide value in a different way. This may include reducing premiums (when a service is no longer being provided), giving refunds for premiums that have already been paid, and providing comparable benefits where possible.
The FCA wants to make sure the needs of insurance customers are being taken care of during the coronavirus. With many people not working or working reduced hours, many are having a difficult time meeting their premiums. The industry regulator wants to ensure that customers are receiving the help they need at a difficult time caused by the pandemic.