How to get a break from paying your car and home insurance due to coronavirus
HOUSEHOLDS struggling to pay monthly car and home insurance premiums due to coronavirus may be able to get a payment holiday.
Insurers Aviva and More Than have revealed car, home, and personal van insurance customers can apply for up to three-month payment holidays - and still be covered in the meantime.
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Other insurers are also offering help on a case by case basis that can include payment holidays.
Here's what you need to know.
What help do insurers have to offer?
Trade body the Association of British Insurers (ABI) says it's down to individual insurers to decide what help they offer to coronavirus-struck households.
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But it adds that its members that offer home and car insurance have pledged to support people affected by coronavirus.
So if you are an office-based worker and now need to work from home, your home insurance cover will not be affected.
Meanwhile, if you use your own car for voluntary purposes, such as to transport medicines or groceries to support others who are impacted by Covid-19, your cover again won't be affected.
Key workers needing to drive to different locations for work purposes because of the impact of Covid-19, will also not see their cover affected.
See the for further details.
City watchdog, the Financial Conduct Authority (FCA), adds that it's held discussions with insurers about how to treat customers fairly.
But as of yet, no wide ranging measures have been announced as we've seen happen with mortgages, loans, and credit cards.
An FCA spokesperson said: "As you would expect, we are in regular contact with the firms we supervise in their respective sectors, including the insurance sector, and earlier last week we held a virtual meeting with insurance chief executives and the ABI to discuss how they can best provide support to their customers during the crisis.
"This covered a range of topics, including the importance of settling claims quickly and fairly to ensure that money gets to hard pressed customers when they most need it."
Are insurers giving payment holidays?
Here's what the major insurers have told us so far:
- Admiral: Offering payment holidays on a case by case basis to those who pay premiums monthly.
- Aviva: Offering up to three month payment holidays on monthly policies. It won't, however, offer payment holidays or refunds annual policies.
- Axa: Giving monthly customers the ability to pay off their policy in one payment or arrange a payment plan to clear arrears over an agreed period of time - on a case by case basis. Annual policyholders should also get in touch if they're struggling, although Axa wouldn't say what options are available to them.
- Churchill and Direct Line: Offering monthly payment holidays on a case by case basis. On annual policies, you need to contact the insurer to discuss your options, which could include moving to monthly repayments or reducing cover levels.
- More Than: Offering payment holidays for one month at a time on a case by case basis, for up to three months. Annual policyholders can't defer payments but should get in touch if struggling.
How do I apply for Admiral's scheme?
Contact Admiral's customer services team for help with repayments if you're struggling.
It says any customer offered a payment holiday still needs to pay the remaining amount of their premium, or loan, before the end of their policy term or contract agreement.
But the price of a customer’s future insurance premium is unlikely to be affected if the payment holiday has been agreed in advance.
How do I apply for Aviva's scheme?
To be eligible for Aviva's payment freeze, you need to have been furloughed but not yet received the 80 per cent payment of your wages, up to £2,500 a month, from your employer.
Or you could be self-employed and unable to work or trade because of coronavirus, and haven’t yet received the 80 per cent earnings payment from the government.
Alternatively, you need to have been made unemployed at any point after March 1, 2020.
Aviva won't ask for proof of any of these scenarios, but you shouldn't lie as it may affect your cover.
You also need to have made at least one payment towards the policy, and your next payment due date needs to be more than ten days ahead.
If your payment is due in nine days or less, Aviva says you'll have to apply after this if you’re still having financial difficulty.
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Note that applications only cover one month's payment, so if you need help for future payments you’ll need to apply again, up to a maximum of three months.
Deferring payments doesn't mean payments are wiped though.
Instead, what you owe is added to future monthly repayments, meaning these will rise after any freeze.
You'll still be covered by your insurance during any payment freeze, and Aviva says deferring a repayment won't affect future premiums.
How do I apply for Axa's scheme?
Struggling home insurance customers who bought their policy directly from Axa should contact it on 0330 024 1239, while car insurance customers who bought direct should get in touch on 0330 024 1229.
If the policy was arranged via an insurance broker, you need to contact the broker in the first instance.
Axa says it won't add any additional interest or fees onto the amount owed and says you'll still be covered in the meantime.
It adds that it won't include this information when calculating the price of future policies.
How do I apply for Churchill and Direct Line's scheme?
Churchill and Direct Line, which are part of the same insurance group, aren't offering blanket repayment holidays to everyone who applies.
You'll need to get in touch with the insurer and your situation will be discussed on a case by case basis.
Where payment holidays are granted, you'll continue to be covered and additional interest won't be charged.
Missed repayments will be split across future repayments, which means you will pay more each month.
How do I apply for More Than's scheme?
Customers can apply by filling out an on More Than's website and selecting the drop down option "I need to make a general enquiry".
More Than will then get back to customers as soon as possible to discuss their options.
If you opt for payments to be deferred, later payments will rise to cover the shortfall, although you'll still be covered by your insurance during the freeze.
More Than says it won't add any additional interest or fees onto the amount owed.
It adds that it won't include this information when calculating the price of future policies.
Will deferring payments affect my credit score?
No. The UK's three credit reference agencies - Experian, Equifax, and TransUnion - have confirmed that repayment holidays taken as a result of coronavirus won't impact your score.
But these need to have been agreed with your provider - you can't simply stop paying of your own accord.
Do this, and it will likely have a negative impact on your score.
More on coronavirus
Can I cancel my insurance if I'm no longer using it?
If you're not using your car because of lockdown you may be able to claim a partial refund on your insurance - here's what you need to know.
Similarly, people with single trip travel insurance policies may also be able to claim a refund given they're advised not to leave the UK - here's how to get a refund.
Home insurance policies will likely still be in use during lockdown, so you're unlikely to claim back any costs here.