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| Coronavirus: Insurer to give £25 refunds as cars and vans sit idle | Coronavirus: Insurer to give £25 refunds as cars and vans sit idle |
| (about 1 hour later) | |
| One of the UK's biggest motor insurance companies, Admiral, is giving a £25 refund to customers as cars and vans sit idle in the coronavirus pandemic. | One of the UK's biggest motor insurance companies, Admiral, is giving a £25 refund to customers as cars and vans sit idle in the coronavirus pandemic. |
| The payment will be paid automatically to anyone with a car or van insurance policy with Admiral on 20 April. | The payment will be paid automatically to anyone with a car or van insurance policy with Admiral on 20 April. |
| The company said it was a "thank you" to customers for staying at home, but also reflected the lower level of claims, benefiting its profits. | The company said it was a "thank you" to customers for staying at home, but also reflected the lower level of claims, benefiting its profits. |
| Other insurers are under pressure to follow suit. | Other insurers are under pressure to follow suit. |
| Some are offering to defer premiums for those struggling to pay, but Admiral is thought to be the first one actually providing refunds directly to customers. | Some are offering to defer premiums for those struggling to pay, but Admiral is thought to be the first one actually providing refunds directly to customers. |
| The owners of 4.4 million vehicles will receive the payment by the end of May. | The owners of 4.4 million vehicles will receive the payment by the end of May. |
| Admiral suggested that £25 was the equivalent for many customers of one month's worth of their annual premium, but for most young drivers it will be far less than that. | |
| Insurers have been heavily criticised during the coronavirus crisis for failing to cover small and medium-sized businesses for interruption to their trade. The industry has responded by saying that many did not have the relevant cover. | Insurers have been heavily criticised during the coronavirus crisis for failing to cover small and medium-sized businesses for interruption to their trade. The industry has responded by saying that many did not have the relevant cover. |
| Drivers have also been asking why they should be paying for a service that they cannot use as expected, namely insurance cover for the regular journeys which have stopped as they follow government guidance to stay at home. | Drivers have also been asking why they should be paying for a service that they cannot use as expected, namely insurance cover for the regular journeys which have stopped as they follow government guidance to stay at home. |
| Cristina Nestares, chief executive of UK insurance at Admiral, said: "This is an unprecedented time when people across the country are driving significantly less than before the lockdown, and we expect this to lead to a fall in the number of claims we are seeing. | Cristina Nestares, chief executive of UK insurance at Admiral, said: "This is an unprecedented time when people across the country are driving significantly less than before the lockdown, and we expect this to lead to a fall in the number of claims we are seeing. |
| "We want to give the money we would have used to pay these claims back to our loyal customers in this difficult time." | "We want to give the money we would have used to pay these claims back to our loyal customers in this difficult time." |
| The company would not reveal to BBC News how much of a reduction it has seen in claims. | The company would not reveal to BBC News how much of a reduction it has seen in claims. |
| More to come? | More to come? |
| More insurance companies should do the same, according to Gareth Shaw, head of money at the consumer organisation Which?. | More insurance companies should do the same, according to Gareth Shaw, head of money at the consumer organisation Which?. |
| "Firms that act fairly now may see that they are rewarded in the future, and we encourage all other car insurers to follow Admiral's lead," he said. | "Firms that act fairly now may see that they are rewarded in the future, and we encourage all other car insurers to follow Admiral's lead," he said. |
| The Association of British Insurers (ABI) said that pricing and refunds were a matter for individual firms, but insurers were being flexible. This included giving free cover to key workers unable to use public transport. | The Association of British Insurers (ABI) said that pricing and refunds were a matter for individual firms, but insurers were being flexible. This included giving free cover to key workers unable to use public transport. |
| He added that by law, vehicles on the road still needed to be covered by insurance, while many people were still using them for essential journeys, such as to the supermarket. | He added that by law, vehicles on the road still needed to be covered by insurance, while many people were still using them for essential journeys, such as to the supermarket. |
| "Even if you do not drive during lockdown, you will still need to be protected against theft, vandalism and damage," an ABI spokesman said. | "Even if you do not drive during lockdown, you will still need to be protected against theft, vandalism and damage," an ABI spokesman said. |
| Mike Powell, car insurance expert at analysts Defaqto, said insurance providers were allowing customers to defer payments, in a similar way to banks with mortgages and utility companies with other bills. | Mike Powell, car insurance expert at analysts Defaqto, said insurance providers were allowing customers to defer payments, in a similar way to banks with mortgages and utility companies with other bills. |
| He pointed out that information on how to access support was available on insurance companies' websites, but this needed to be agreed with the provider, rather than simply cancelling payments. | He pointed out that information on how to access support was available on insurance companies' websites, but this needed to be agreed with the provider, rather than simply cancelling payments. |