The company says it can afford the refunds due to fewer claims made during the coronavirus lockdown.
The LV refund scheme differs from Admiral’s £25 flat-rate approach. To qualify for LV’s refund of £20 to £50, a customer must meet the following requirements:
- Have not yet received the 80 percent payment scheme from their employer, or;
- Are self-employed and are unable to work or trade due to the coronavirus, and haven’t received the 80 percent payment, or;
- They were made unemployed at any point after 1 March 2020
Customers who arranged insurance via a broker are excluded from the scheme.
‘Right thing to do’
Steve Treloar, chief executive of LV general insurance said: “Right now, there are millions of families across the UK who are facing unforeseen pressures on their finances as a result of coronavirus.
“Our research shows that a third of people with motor insurance are currently concerned that they will struggle to pay bills such as insurance premiums over the next three to six months with 1 in 10 saying they are very concerned at their ability to do so.
“So, we believe it’s vital and the right thing to do to concentrate the additional financial support we can offer on those who are really struggling.
“We spent a lot of time thinking about the best way to help customers and this enables us to give between £20 and £50, which to some families will make a real difference.”
LV’s package ‘a step down’
James Blackham, CEO of By Miles, says the LV scheme doesn’t go far enough. “While another major insurer, LV, offering refunds to customers is a good thing – what they are offering is actually a step down from Admiral’s support.
“While Admiral gave an automatic £25 refund to all customers, LV is only offering refunds of between £20 – £50, but only to those who can prove they are financially worse off due to coronavirus.
“And they’re making policyholders do the leg work – asking drivers to contact them directly to apply for a rebate.
“We hope this is just the first step, and LV is prioritising customers who’ve experienced financial difficulties before offering refunds to all their drivers who have not been getting their money’s worth from their policy.
“Those who are driving less, you should pay less. It’s as simple as that. Any customers who are looking for refunds from their insurer (if they haven’t been already) should contact their insurers and make this point.
“We forecast traditional car insurers will save in excess of £1 billion due to the lockdown and hopefully today’s guidance from the FCA will see more car insurers do the right thing and pass on these savings – to all of their customers.”