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Car insurers urged to refund drivers unable to use vehicles

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Car insurers are being urged to pass savings they’re making as a result of lockdown measures onto customers.

It comes as two major insurers in the US said they would refund drivers some of their premiums, or offer a discount, because they’re stuck at home in lockdown, which has resulted in a dramatic decline in accident claims.

It is hoped this news will spur insurers in the UK to do the same.

Pay per mile insurer By Miles said many drivers are paying for services they’re not using during a financially uncertain time, with young drivers hit hardest. This is because some may be paying around £200 a month for car insurance while staying at home.

The firm says the current situation is only benefiting car insurers, which stand to make in excess of £1bn from a reduction in claims.

Its own data reveals a 69% decrease in daily average miles driven nationwide since lockdown and a 72% decrease in London.

James Blackham, founder and chief executive of By Miles, said: “We’re challenging traditional car insurers to recalculate their rates and make insurance fair under these extraordinary circumstances. As people are driving far fewer miles while in lockdown, the number of insurance claims due to accidents also decreases – and those savings should be passed on to the public.

“Members of the Association of British Insurers (ABI) have pledged support for people affected by the Covid-19 pandemic, but for as long as traditional insurers continue to charge a fixed amount regardless of how many miles someone drives, motorists will continue to be overcharged.

“Policyholders must be able to request a premium reduction or extra months added onto their policy – anything else isn’t treating customers fairly.”

The ABI said refunds or discounts were down to individual insurers and any financial concerns should be discussed with the insurer.

An ABI spokesperson, said: “Home, motor and travel insurance providers have committed to offering enhanced customer support and flexibility during this difficult period. It is a commercial decision by individual firms if they want to compensate their customers with payment holidays. Insurers are encouraging customers who face difficulty paying their premium to speak to them. “

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