LV= has bowed to consumer pressurer and announce that it will be offering partial refunds to car insurance policyholders, up to £50. However, the catch is that any refund will be means tested; you have to prove that you’ve suffered some degree of financial distress during the Coronavirus lockdown. LV= has set aside about £30 million into a special assistance fund, which will make grants to those customers deemed to need it most.
Providing a special Corona help fund is an interesting strategy, since it raises obvious questions concerning verification of ID, policy details and actual financal circumstances. Then there’s the decision making admin process, which all takes time and in some cases such as self employed people on zero hours work, actual proof that no work has been undertaken recently. The LV= refund T&Cs are that you must be recently jobless, on furlough but not yet in receipt of money or self-employed and unable to work.
INDUSTRY COMMENT
By Miles CEO James Blackham commenting on the story that LV is providing partial car insurance refunds to customers in distress due to impact of coronavirus:
“While another major insurer, LV=, offering refunds to customers is a good thing – what they are offering is actually a step down from Admiral’s support.
“While Admiral gave an automatic £25 refund to all customers, LV= is only offering refunds of between £20 – £50, but only to those who can prove they are financially worse off due to coronavirus. And they’re making policyholders do the leg work – asking drivers to contact them directly to apply for a rebate.
“We hope this is just the first step, and LV= is prioritising customers who’ve experienced financial difficulties before offering refunds to all their drivers who have not been getting their money’s worth from their policy. Those who are driving less, you should pay less. It’s as simple as that. Any customers who are looking for refunds from their insurer (if they haven’t been already) should contact their insurers and make this point.
“We forecast traditional car insurers will save in excess of £1 billion due to the lockdown and hopefully today’s guidance from the FCA will see more car insurers do the right thing and pass on these savings – to all of their customers. Fewer cars on the roads means less chance of an accident and far fewer claims. This crisis has shown UK drivers that the way car insurance works is unfair – we believe flexible, pay-as-you-drive policies will become the new normal.”
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