Help for insurance customers from today
Insurers are now expected to allow policyholders to defer costs while keeping cover in place.
The Finance Conduct Authority (FCA) confirmed last week that insurers would be obliged to defer payments, reduce premiums, waive cancellation fees and offer discounts to people who can’t afford insurance due to Covid-19.
The temporary rule change affects people who hold car, home, travel, private medical, life, income protection, and accident and sickness insurance policies.
The regulator first put forward plans to help these customers at the beginning of May.
The rule change comes amid growing concern that although some providers have offered struggling customers help with payments, other insurers have not been so accommodating.
Insurers are now required to reassess whether risk profiles of customers may have changed because of coronavirus, and lower premiums where appropriate. For example, a car insurance policyholder who normally commutes to work in their car will now be a lower risk if they are working from home.
Insurance firms also need to consider if cheaper products would be a better fit or add-ons are still needed. They are also expected to waive cancellation and other fees associated with adjusting customers’ policies.
Where amendments to the insurance cover do not help alleviate the temporary payment difficulties for customers paying their premium in instalments, the FCA expects firms to grant customers a payment deferral of one to three months unless it is obviously not in the customer’s interests to do so.
Anyone who wants to request a payment holiday must do so by 18 August.
Customers who are struggling to afford their insurance payments because of the impact of coronavirus should contact their insurer or insurance broker to discuss their options
The measures will be reviewed by the FCA in the next three months and may be revised if appropriate.
You can read about other help you can get with financial issues due to Covid-19 here.