Insurance customers who are struggling financially because of coronavirus will be able to request payment holidays from next week – and some may also be able to move on to a cheaper deal or get a partial refund.
The Financial Conduct Authority confirmed a package of temporary help for customers, which will come into force on Monday May 18 and be reviewed in the next three months. It said customers’ risk profiles may have changed because of coronavirus and there may be scope to offer customers materially lower premiums.
Sheldon Mills, Interim Executive Director of Strategy and Competition at the FCA, commented:
‘As with other areas of finance, we have worked quickly to draw up measures to help policyholders in financial difficulty because of coronavirus. The majority of respondents expressed support for the proposals we published at the start of May. Many firms in the insurance industry have already taken some of the actions we are suggesting here to support customers, such as premium reductions, discounts, waiving fees, and payment deferrals. The measures confirmed today will provide urgent support to those that need it.’
Today’s measures will come into force on Monday 18 May 2020. They will be reviewed in the next 3 months in the light of developments regarding coronavirus and may be revised if appropriate.
The FCA says that it also expects firms to consider reviewing any interest rates associated with instalments to determine whether they are consistent with the obligation to treat customers fairly in the light of the exceptional circumstances arising out of coronavirus.
“Firms should make clear in their communications, including on their websites and apps, the different solutions available to customers, and encourage them to make contact if they are experiencing temporary financial difficulties.
Customers who are struggling to afford their insurance or premium finance payments because of the impact of coronavirus should contact their insurer or insurance broker to discuss options. It is important people don’t leave themselves uninsured and should not hesitate to contact their insurer.”