Why Aren’t Car Insurance Companies Returning Premiums?

Sun 24th Jan 2021

Motorists saw their annual mileage fall significantly in 2020 due to pandemic lockdown restrictions, but insurance companies have not repaid their premiums.

Research from one of the UK’s biggest consumer campaigners, Which?, has found that just 21 per cent of car insurance customers have seen some of their premium repaid, this despite almost half (49%) seeing a major decrease in their mileage?

Of the 2,300 insurance customers surveyed, many felt that their insurance had lost its value and that they were paying over the odds for their cover. The same research found that 14 per cent of customers had struggled to make their premium payments due to effects of the pandemic.

Which? Has called on the Financial Conduct Authority to enforce tighter restrictions on insurers to support customers struggling financially.

“While insurers could not have predicted the unprecedented impact of coronavirus, customers will not appreciate it if they feel firms are benefiting at their expense – or if they are being left without support at a time of need,” said Harry Rose, Which? editor.

“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 FCA rightly proposed guidance for firms to support customers struggling due to coronavirus, but it's concerning that the regulator is no longer requiring insurers to proactively contact those who miss a payment. 

“Customers missing payments are likely to be vulnerable, and firms should be doing everything they can to engage with and support those who need it most.”