Car insurance refunds for hard-up drivers

MILLIONS of drivers who have suffered financially due to the pandemic could be granted refunds on their car insurance.

Insurers have had to settle far fewer claims during lockdown, with most drivers using their cars sparingly, if at all. Some firms have already offered refunds – but others have failed to follow suit.

As a result, the Financial Conduct Authority has now ordered them to ‘reassess the risk profile’ of customers and act accordingly.

This could mean switching motorists from to cheaper deals – leading to lower monthly premiums, or partial refunds for drivers who have paid up front.

The FCA has already instructed banks to offer payment holidays to mortgage and credit card customers who have encountered financial difficulties amid the virus crisis. It is also considering whether insurers should offer refunds to all customers – regardless of their financial situation – who have not had value for money from their policies during lockdown.