Car insurance firms should calculate refund amounts “based on the risks” and should vary the amount paid back depending on each individual agreement. This would see those on higher premiums offered bigger refunds instead of a standard rate.
Speaking to Express.co.uk, By Miles CEO James Blackham said companies should realise savings were passed on due to the crisis and should be paid back to consumers.
He added payments needed to be made instantly to customers who may be in a difficult financial situation due to the ongoing pandemic.
Mr Blackham said: “In an ideal world what I’d like to see them do is to sit down and work out honestly how much savings they are making as a result of people driving less.
“To say well actually these savings are a result of people following the government’s advice and self isolating due to covid and therefore we are going to pass these savings back to customers.
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Although the LV scheme is the first to vary the amount of refund offered based on circumstances, this does come with a catch.
These refunds are not automatically offered with motorists needing to apply and then offered a refund of between £20 and £50.
However, the amount offered is based on whether motorists meet LV’s definition of a driver considered to be “struggling financially”.
The £30million scheme is just the second firm to offer any sort of financial refund to motorists with other leading companies failing to announce similar schemes.
Other insurance firms have committed to offering payment holidays or the chance to update a policy instead.
Mr Blackham praised Admiral for being proactive in their decision to offer refunds to customers and pass savings onto motorists.
Although he hinted it had been an excellent piece of PR for the firm, he claimed the move had been made to help customers that had been most affected.
He told Express.co.uk: “I do think it is better for car insurers to be proactive in what they’re doing than it is to be reactive and doing it sort of because they’re forced to.
“I think to be fair to Admiral, they’re really the only ones that have really done it.
“If it was for the PR it would be very expensive PR, I do think they genuinely have looked and said ‘we have got a bit more money in the pocket and we obviously do know drivers have been driving less’. They’ve seen the claims frequency has dropped dramatically.”
Mr Blackham has claimed car insurance firms who fail to offer rounds could be set to make up to £1billion during the coronavirus shutdown.
Car insurance claims are predicted to dramatically fall over the next couple of months as fewer journeys are made.
Even after lockdown restrictions are lifted, motorists could be slow to get back to normal ways as many decide to continue working from home.
Mr Blackham said: “The reduction in claims is so great and the amount of money that insurers will make as a result of it is significant and meaningful.”
Published at Fri, 08 May 2020 06:34:00 +0000