Making Cents: Putting car off the road can lead to savings of 75%
One small silver lining for motorists during the current Covid-19 crisis is that they stand to benefit financially as a result of the restrictions imposed to stop the spread of the virus.
Last month, five of Ireland’s biggest insurers announced plans to issue a refund or rebate to customers - Allianz, Axa, FBD, RSA, and Zurich.
“We are now six weeks into the Covid-19 restrictions on movement and it is clear that road usage levels have fallen significantly,” Moyagh Murdock, CEO, Insurance Ireland, said when the plans were announced.
“While the duration of these restrictions is still uncertain and it is still too early to fully assess the financial impact on the motor insurance sector, but recognising the unique challenges in the Irish market, insurers have agreed to address the issue by signing up to a set of core principles.”
This was followed a few days later by a similar announcement from Liberty Insurance and other insurers may follow.
Insurers are taking a variety of approaches in how they are returning money to customers.
For example, Allianz have said they will refund €30, while Liberty customers will receive 15% of their premium back for a period of two months, subject to a minimum refund of €10. Both FBD and Zurich insurance companies have said they will send their motor insurance customers gift cards.
FBD Insurance said that One4all cards is the fastest and most efficient method to provide rebates for such a large number of customers.
The amounts won’t be huge for most but welcome nonetheless.
I spoke to Jonathan Hehir, Managing Director of Insuremyvan.ie and Insuremycars.ie to ask if there were other ways motorists could save at this time.
He says anybody who is close to renewal should consider carefully if it is time to move, and should take into account which insurers are offering refunds or rebates and which are not.
They can also use the time at home to research the best deal.
“Without a doubt people have more time on their hands,” Mr Hehir said. “Shopping around for car insurance is quite a time-consuming job for people to do. I definitely think people should take advantage of this time.
“If you’re not going out of your home today, and you have time on your hands it is worth spending a few hours shopping around for your car insurance.
“I would nearly guarantee most people you will save more by doing that that any rebate you are going to get in the post.”
However Mr Hehir doesn’t recommend cancelling a policy if it isn’t due for renewal.
Generally cancelling a policy midterm doesn’t work out for people financially, between short period rates and some insurers charge cancellation charges.
But there is another option to allow people to save on their existing policies, particularly those who may be cocooning, unable to work or with much reduced need due to children staying home.
“If you have a car or van insurance policy and you’re not using your car, there is an option to suspend the cover with nearly all insurers,” he said.
“30 days is normally the minimum period that you can suspend it. Fire and theft cover will be kept on the vehicle, so if the car is stolen you will be insured. You are just not insured to drive it in the period you suspend it.
“You could ring and suspend it with me today and ring me in 30 days and say ‘I want to put the car back on the road’. When you come back, you will be refunded 75% of the premium for the days, the 25% is kept for the fire and theft cover.
“Some people might have already had their car off the road and it could be another four weeks or more before they need it.”
Motorists cannot suspend retrospectively, Mr Hehir stressed. But if you have already found you are only using your car minimally, it is worth considering if you could do without it.
Or, in a two-car household, think about if you could take one off the road for a time.
If you find that it is not working out, and you need to get back on the road within 30 days, you can resume cover at any time. You won’t get a rebate, but there will be no negative impact for having given it a try.
While some insurers traditionally ask for the insurance disc to be returned in the post, Mr Hehir said there can be flexibility on this, particularly for those insured through brokers.
“You could save more that way than from getting a rebate from the insurers,” he said.
“Your refund will be calculated, processed and sent out to you within a couple of days.”
He sees it as an excellent option also for tradespeople, many of them van drivers.
“If it is a two-vehicle family, a van and a car, the van is one they are likely suspending and leaving parked up, he said.
“They are not working, but fire and theft is on it and they will get a refund from us when they go back. It is particularly suitable for them.”
