For people who drive on UK roads, one of their biggest financial outgoings is their car insurance - whether they pay monthly or annually for cover.
And due to current circumstances, people are using their vehicles a lot less than they were before the pandemic, as the government continues to urge everyone to stay at home (unless for essential travel), so it comes to no surprise that many drivers are asking their insurers whether or not they can cancel their policy, or even get some money back during this financially difficult and unstable period to help ease the burden.
Cancelling your car insurance - Is it possible?
For those who have been financially affected by the coronavirus pandemic and are not currently working or are working from home for the foreseeable future, you may want to cancel your car insurance policy to save money.
As with any insurance policy, you are entitled to cancel - but be aware that you will probably have to pay a cancellation fee, and if you don’t have insurance, you are not legally permitted to drive a vehicle in the UK.
Many insurers have also said that cancelling car insurance is not possible for cars that are still on UK roads - even if it is parked somewhere in public and you are not using it.
If you are caught driving an uninsured vehicle, you could face penalties such as a fine of £300 plus 6 points on your driving licence, and in some cases, you could end up being banned from driving or have an unlimited fine. The police can easily detect an uninsured vehicle with their automatic number-plate recognition (ANPR) device or via AskMID.
If you are not using your vehicle at all, and it is parked on private land, you can declare it as ‘off the road’ by getting a SORN (statutory off-road notification) with the DVLA. If your car or van has a SORN, you do not need insurance or to pay for vehicle tax, so you can suspend your policy and get a full refund for any remaining road tax.
Some insurance companies waiving cancellation fees
Insurance company AXA has said that they will waive the cancellation fee for their customers who have declared their vehicle as 'off the road' with a SORN and want to cancel their policy, so it is worth ringing up your insurance company if you're thinking of doing the same.
LV= car insurance has also waived administration and cancellation charges, in addition to cancelling the excess on any claims made by those affected financially due to Covid-19.
Important: When you intend to drive your vehicle again, you must have car insurance in place as per UK law, otherwise you will not be financially covered for any damage done to your vehicle, including fire or theft, and you will be driving illegally.
The advice given by money-saving expert, Martin Lewis, is that you will need to consider whether or not it’s worth cancelling your car insurance and getting a SORN, as we do not know how long the government's lockdown and social distancing measures are going to last and you may only make a small saving (the amount you save will be based completely on your personal situation) - so try to work out if it will financially benefit you in the long-run.
Can I get a refund on my car insurance?
As the Coronavirus crisis is constantly changing and affecting peoples’ finances, a lot of companies are doing all they can to ensure their customers know where they stand and that there’s help available if they have been directly affected by Covid-19.
Not all companies are offering help yet, however, and the support offered will differ depending on the insurer, so the first thing you should do is contact your insurance company to see what help they can offer you.
As mentioned above, you are likely to face a cancellation fee, rather than a refund, if you cancel your policy - but it is worth asking your insurer if they will offer some form of refund, like that currently offered by Admiral - one of the first insurance companies to reward customers for staying home.
Admiral to give £25 refund
Due to the fact that millions of people are driving a lot less now and the number of accident claims being made is a lot lower, Admiral is giving a £25 refund to all their customers who purchased a car or van insurance policy on Monday 20th April, as a total of 4.4 million vehicles were insured with the company that day.
All in all, they are giving back a total of £110 million as a way of thanking their customers for staying at home during the pandemic.
Other Admiral Group insurers, including Diamond, Elephant and Bell, will also be giving their customers a £25 refund if they bought cover on 20th April. Customers who purchased cover with Admiral on this date do not have to get in touch with the company - Admiral will automatically refund you some time before the end of May.
As for other insurance companies, Martin Lewis said he has asked Aviva, AXA and LV= if they are going to offer a similar deal to help their customers, but nothing has been mentioned yet.
The best thing you can do is contact your insurer directly yourself - just remember that if you do cancel your insurance, you are not legally permitted to drive on UK roads and you will have no financial support if you’re involved in an accident.
LV car insurance refunds (up to £50)
At the beginning of May 2020, car insurance company LV= announced that £30 million will be made available to give existing customers with a car and/or motorbike insurance policy a refund. Similar to Admiral's reason for doing so, this is mainly due to the significantly lower number of claims being made.
Policyholders could get a refund of between £20 and £50, provided that customers have been financially impacted by the Coronavirus outbreak in certain ways.
Before getting in touch with LV to ask for a refund, you will need to make sure that you meet the following criteria:
- Since 1st March 2020, you have lost your job due to Covid-19.
- You’ve been made a furloughed employee, and you have not been given any financial help via the Coronavirus Job Retention Scheme yet.
- You are a self-employed worker and you cannot currently do business as usual as a result of the Coronavirus, and you’re not receiving money from the Self-Employment Income Support Scheme.
Call LV= on 0800 085 5608 to ask for a car insurance refund only if the above applies to you, and bear in mind that phone lines are currently very busy due to the circumstances.
If you are not eligible, you may be able to change your policy temporarily (reduce mileage or change cover to fire and theft). Contact LV on the phone number above to enquire about this.
My driving habits have changed - Do I need to notify my insurer?
Generally with insurance, no matter what type it is, you are required to be completely honest with your insurer and you should let them know when your circumstances change to avoid invalidating your policy and wasting money.
While you may not wish to cancel your car insurance, you may wish to contact your insurer to let them know about any changes you've experienced as a result of the coronavirus.
Car insurance comparison site - Compare the Market - refers to the following changes you may need to inform your insurer about:
- You are no longer driving to work: If you usually drive to and from your workplace, your insurance policy must cover SDPC (social, domestic, pleasure and commuting). However, if you are now working from home or have lost your job due to the pandemic and you are not going to be commuting for the foreseeable future, contact your insurer - just remember that you will have to ring them as soon as you intend to start driving to work again.
- You’ve changed the place where you keep your vehicle: If you’re currently not using your car or van because you’re staying at home as per government rules, you might want to store it in a different place during the day and night, such as a garage. If so, let your insurer know.
- You’re driving less, so your anticipated annual mileage is less: If you feel that you’re not going to be using your vehicle as much anymore, contact your insurer as this is one of the key factors that could reduce the cost of your cover. Likewise, if you are driving more than usual, you should let them know about this, as you could be invalidating your insurance policy.
Bear in mind that by contacting your insurance provider to inform them of any of the above changes, you are unlikely to receive a refund or get much money back (if any), but any way in which you can save during these difficult times is worth it, so it pays to contact your insurer to see what they can do.
Remember that you'll have to contact them again if your situation goes back to normal or changes in any other way.
For those who are key workers, the Association of British Insurers (ABI) has stated that NHS workers or other volunteers helping to tackle the coronavirus do not need to get in touch with their insurer.
Save money on car insurance today
If you’re unsure when your existing car insurance policy is due to expire or renew, double check it as soon as possible. If you want cheaper car insurance, avoid staying with your current insurer unless they can offer you a better deal than those offered by other insurers.
People tend to save the most money with their car or van insurance by switching providers each year because this way, you are generally rewarded with cheaper premiums for being a new customer. Read more about how staying loyal to your insurer can cost you more.
So when it comes to getting a new car insurance policy, use price comparison websites to compare deals and policies in order to save money - and make sure you’re getting sufficient cover and the right policy for you and your needs.
Alternatively, you can get a cheap quote with Bobatoo right here, today! Simply tap the green button below or see how you can get money back from your insurance here.
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