HOUSEHOLDS struggling to pay monthly car and home insurance premiums due to coronavirus may be able to get a payment holiday.
Insurer Aviva has revealed its 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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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 what help they offer to coronavirus-struck households.
But it adds that its members that offer home and car insurance have pledged to support people affected by coronavirus.
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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 ABI's website 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?
So far, we've only seen Aviva offer payment holidays on monthly policies. It won't, however, refund annual policies.
The Sun has asked Admiral, Axa, Churchill, Direct Line, LV=, and More Than if they plan to do so the same or if they'll offer lower repayments instead, and we'll update this story as soon as we get a response.
How do I apply for Aviva's scheme?
To be eligible for Aviva's payment freeze, you need to have been 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.
To apply, complete the relevant online form on Aviva's website.
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.
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.
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.
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