Car insurance providers have been told to allow for delayed payments and waive fees when necessary, to help customers who are in financial difficulty due to the coronavirus pandemic.
The Financial Conduct Authority (FCA) has told insurers that they must waive the cancellation fees – among others – that customers would traditionally have to pay when making adjustments to their policies. They’ve also been requested to reassess customer risk profiles to see if premiums can be lowered.
It’s been requested that firms also consider whether other products could be better suited to a customer’s needs and revise cover to reflect this.
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.”
The new requirements are meant to help drive down the cost of payments for those who pay monthly or give a partial refund for those who pay for their annual premiums in full.
However, if refunds aren’t available or amendments cannot be made to a policy, the FCA is stating that insurers should offer payment deferrals of between one and three months. Firms also have the option to defer payments for more than three months if they believe it’s in the customer’s best interest.
