5 questions to ask your car insurance provider during COVID-19

The good news for motorists travelling down Australia’s highways is there has been less traffic.

Less traffic leads to less accidents.

And less accidents, mean fewer insurance claims.

Seeing this trend, the car insurance industry has stepped up to ease the burden on customers who are feeling the economic impact of the coronavirus pandemic, otherwise known as COVID-19

While there are some companies that have frozen premiums, others are offering financial relief and support options.

Suncorp, the umbrella organisation for brands including AAMI, Gio, Bingle, Apia, Shannons, Terri Scheer and Vero, is offering various financial relief and support options including flexible payment options and waiving cancellation fees.

Suncorp’s ‘Peace of Mind Package' offers financially affected customers a discount on their car insurance of up to 20%.

Compare and see if you could save on Car Insurance Policies here.

A three-month premium waiver is also on offer along with Insurance Health Checks to help customers save, including options such as lower premiums for reduced vehicle use.

“The summer of devastating bushfires and severe storms was a recent reminder of why we have insurance to protect our homes, businesses and motor vehicles. The value of insurance has never been clearer for many Australians and we want to help them to remain protected,” he said.

”Over the past month, our people have been helping thousands of customers who are being impacted by COVID-19, and while everyone’s situation is unique, we know some short-term relief will go a long way to easing their worries while ensuring they remain insured,” Suncorp Insurance CEO Gary Dransfield said.

However one Suncorp spokesperson said we should still be mindful that, “Even with reduced people on the roads at the moment, cars are still at risk from storms, theft, damage while parked, and road accidents.”

Australia’s recent $4.6 billion natural disaster season caused a spate of motor vehicle insurance claims, with more than 150,000 claims received above normal claims expectations. It took its own toll on the industry. However, as with Suncorp and many other insurers, customer retention is paramount and they are doing what they feel is necessary, despite the further damage that may be done to their bottom lines.

As for other motor vehicle insurers, QBE Insurance (QBE) is offering gift cards to Australian motor insurance customers.

Eligible existing comprehensive car insurance customers with QBE can also receive a one-off COVID-19 benefit in the form of a $50 gift card. This applies to new customers also, whilst new and existing motorcycle, caravan and other private motor insurance customers will receive a $25 gift card (conditions do apply).

QBE Group CEO Pat Regan believes insurers should step up to assist customers. “While the path through this pandemic remains uncertain, we will continue to be there to support our customers and their communities, true to our purpose to give people the confidence to achieve their ambitions,” he said.

NRMA is offering deferred payments for up to six months and financial support to small business and travel insurance customers

Australia following global industry trends

Australian insurance companies’ response to hardships caused by COVID-19, follow a similar trend to insurance companies in the US and UK.

In these countries, some insurers are offering full refunds.

Youi is the only insurer in Australia that has taken this approach. Its mantra of ‘how you use or don’t use your car’ essentially determines the amount people pay for their policies. It seems in this time of distress, that philosophy is right to the fore.

New and existing Youi policyholders have been given temporary relief on their car insurance premiums if the coronavirus crisis has driven them to use their cars less.

A Youi company spokesperson told Insurance Business Australia, “Where a policy premium has been paid annually or quarterly,” explained the insurer, “Youi will pay the cashback to the customer monthly for three months, on the same date each month that the policy was originally entered into, commencing one month following acceptance of this offer, to the card or bank account used to pay for the policy.”

It is unlikely other insurers will take this approach, in which case customers may start looking at alternative providers to alleviate some of the immediate burden, or one they feel will take a kinder approach to them in the future.

The need is there, but should you change car insurers?

“Insurers are focusing on assisting their customers, including those experiencing financial hardship, and are providing a range of relief and support measures,” said Insurance Council of Australia (ICA), head of communications & media relations Campbell Fuller.

Interestingly, while there are less cars on the roads, some states have recorded more serious accidents. The South Australian road toll, in particular, has increased during the COVID-19 lockdown despite less cars on the road.

Again, there is not only a need to be safe on the road at all times (pandemic included), there is a need to have appropriate insurance.

If customers are unhappy with their insurer’s response to the COVID-19 pandemic, now could be an excellent time to switch coverage.

You can compare motor insurance providers through the InfoChoice car insurance comparison site.

If you do consider changing insurers, call your existing provider before making any decision.

Discuss payment plans and other burden-easing options.

Insurers will most likely be willing to help, however if they don’t meet your needs then look elsewhere.

Questions to ask include:

  1. Do you offer extended grace periods? In the current climate, most insurers won’t cancel your policy, but you should fine out what their grace period is.
  2. Will you waive late fees and penalties? Waiving fees or penalties, could go a long way to helping ease a customer’s financial burden. If your insurer doesn’t waive these fees, perhaps another provider will.
  3. Do you offer payment plans? Most insurers will. It’s in everyone’s best interest.
  4. Can I get a discount? Discounts can range from multi-policy to multi car, to new car, to anti-theft and good driver discounts. If you don’t ask, you don’t get.
  5. Delivery driver coverage. Here’s an interesting one. What if you are a deliver driver and now you are on the road less. Most delivery drivers using their own vehicle, have to take out extra insurance, could the extra coverage be waived. Ring up and find out.

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