Car insurance and coronavirus

Car insurance and coronavirus – what you need to know

By Laura Howard on Wednesday

We’ve got the answers to the most common questions around how Covid-19 is affecting car insurance – and all things motoring.

Woman putting on protective gloves in car

First published 22 April


Millions of cars across the country are sitting redundant on driveways during lockdown, while others have become lifelines to cater for the vulnerable and sick – but will you need to update your insurer if the way you use your vehicle has changed?

What about if your MOT is due, you want to make an insurance claim, or you’re worried about affording your monthly car finance payments?

Find the answers to the most common questions with our guide.

FAQs

The way I use my car has changed because of Covid-19. Should I contact my insurer and update my policy?

Insurers have introduced a package of enhanced support to drivers impacted by Covid-19. It will be in place until either travel restrictions are lifted or 31 July – whichever is soonest.

It means that, so long as you have a private policy for a private car, you do NOT need to amend your cover or contact your insurer in the following scenarios:

  • You are now driving to work (rather than say, taking the train)
  • You are now using your car for voluntary purposes (for example, to transport medicine or groceries to those in need)
  • You are a worker in a critical sector that’s listed by the government and now need to use your car to drive in different locations.

What if I am buying a new policy and the way I use my car has changed?

The support set out above applies to new and existing policies, so if you are making a new application you should answer questions to reflect your normal circumstances – not how you’re using your car during lockdown.

It also means that when restrictions are lifted you will have relevant cover at the right premium.

If I am self-isolating can someone else drive my car to buy my essential shopping?

So long as your helper has their own fully comprehensive car insurance which includes a ‘driving other cars’ (DOC) clause – they’ll be covered to drive yours. However, this will only be on a third party basis which means any damage to your own vehicle will not be covered.

If your helper’s insurance doesn’t carry the DOC clause (check the small print) you’ll need to contact your insurer and temporarily add them to your policy. This can incur an administration fee (typically between £15 and 30) and, again, will only provide third party cover.

If you want your own car to be insured too, you’ll need to add your helper as named driver to your policy (so long as it’s fully comprehensive). This is likely to affect your premium but it in some cases, it could even go down.

Can I cancel my insurance if I’m no longer using my car?

Unless you officially register your vehicle off road by applying for a SORN, the law states you need valid car insurance. This means you will not be able to ‘suspend’ your policy just because you are not using your car during lockdown.

If you do decide to declare your car as SORN because of coronavirus and want to cancel your insurance policy some providers are waiving the cancellation fee.

How can insurers justify their premiums when claim numbers are down during lockdown due to fewer people driving?

Some insurers are already making goodwill gestures to balance this out. Admiral Group Insurers – which includes Admiral, Bell, Diamond and Elephant brands –  are awarding all their car and van insurance customers an automatic £25 refund on their premiums.

The rebate will be applied automatically by the end of May (so long as your policy was in place as of 20 April 2020) according to the insurer group, so you don’t need to make an application.

LV= has also confirmed it is paying out between £20 and £50 to car and motorbike insurance customers – but only if they have been financially affected by coronavirus.

The cash will be offered to customers who have:

  • been made unemployed since 1 March
  • furloughed but not yet received money through the Coronavirus Job Retention Scheme
  • self-employed, unable to work and not yet received money through the Self-employment Income Support Scheme

If you’re a LV= policy holder, check if you are eligible at the insurer’s dedicated coronavirus page. If you are, call 0800 085 5608 to make your claim.

Other car insurers may be morally pressured to follow Admiral and LV=’s lead. We’ll keep you posted.

UPDATED: What if I can’t afford my car insurance payments?

You will be able to ask your car insurer for help if you are struggling to make payments due to coronavirus – under new rules set down by industry regulator, the Financial Conduct Authority (FCA).

This could include a temporary reduction in cover – from fully comprehensive to third party, fire and theft for example – which reduces your monthly premiums or triggers a partial refund if you’ve paid for the year upfront.

If you can’t come to a suitable arrangement, you can ask for a payment deferral of between one and three months – in some cases longer. You will have to actively make the request before 18 August, when the current support will be reviewed again by the FCA.

There are other measures you could take yourself. For example, if your car insurance premium is due and you usually pay annually, consider switching to monthly direct debit. While this can work out more expensive, it could ease cash flow problems in the short term.

I want telematics insurance – can I still get it?

Telematics insurance usually means having a black box installed in your car by the insurer which monitors the way you drive and charges premiums accordingly.

But as lockdown has prevented engineers from coming out to fit the devices, many providers are not selling this type of cover.

However, there are other telematics options available – plug-and-drive devices, for example which are sent out you and simply plugged into your car’s charging port or cigarette lighter. Or you could use a telematics insurer with an app you can download which tracks how you drive automatically through GPS.

Compare available telematics insurance here.

Can I still make an insurance claim?

Insures have pledged that processing claims remains a priority during Covid-19. It may take longer to get through on the phone though, so check your insurer’s website to see if you can make a claim online.

What if I’m struggling to afford the finance payments on my car?

From Monday April 27, a three-month payment freeze is available for people struggling to pay their car finance loans as a result of coronavirus.

Don’t just cancel your direct debit though as you will need to apply for the payment freeze and have it agreed by the finance company.

If you think you will still struggle when the payment freeze ends, get in touch with the finance company to discuss your options.

Lenders will not be able to end a car finance agreement or repossess your vehicle during the payment holiday.

What will happen if my car’s warranty expires during lockdown?

Check with your car manufacturer directly – but many are ‘stopping the clock’ on warranties during lockdown, so any repair or service that falls under warranty can be postponed until it is lifted. However, you will typically still need to report the problem during the warranty period.

Car dealerships that remain open are generally only carrying out essential repairs for key workers.

What happens if my MOT is about to expire?

As of March 30, MOTs are being automatically extended for six months. For example, if your MOT was due to run out on 4 June, it will now run out on 4 December.

However, this is strictly on the basis your car is legally roadworthy – which you will be responsible for.

You will not be penalised on your insurance if your MOT expiry date is extended.

Do I still need to buy car tax?

Unless you declare your vehicle as officially off-road (SORN), car tax is payable as normal. Although if your MOT was due in the same month as your car tax, you will need to wait until it has been officially extended before you can buy your car tax online.

Can I still buy car tax if I don’t want to buy it online?

The majority of Post Office branches are open and you will be able to buy car tax from one that offers the facility (check before you go).

You’ll need to take your V5C logbook with you (or your V5C/2 if you’ve just bought the vehicle) and observe social distancing rules.

Someone else can do this on your behalf (or online) if you are elderly or vulnerable.

What happens if I was due to take a driving test?

The government has suspended driving tests for up to three months. You’ll get an email at least two weeks before the original date of your test with a new date and time.

Theory tests have been postponed until 20 April. After that date, you can go online and book another one.

Both tests however are still available for critical workers.

Can I still take a speed awareness course?

Classroom-based National Speed Awareness courses have been suspended initially until 1 July. If you already have a course booked, you will be able to complete it online.

Can I still call for assistance if my car breaks down?

Both the AA and the RAC are still offering emergency roadside assistance to their members – and free cover to NHS workers. You will need to maintain at least two metres distance and disclose any symptoms of coronavirus on the initial call.

How can I fill up my tank safely?

Wear latex gloves when using the petrol pump and pay with a card at the pump where you are given an option. If you need to go into the petrol station to pay, observe social distancing and use contactless at the checkout – now up to £45. 

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