Australia’s largest car insurance companies will not offer any partial refunds to motor insurance policyholders although a COVID-19 lockdown has reduced the use of cars and the risk of crashes.
According to a report in the publication CarAdvice, even though Australia recorded a dramatic reduction in the road toll and in the number of serious crashes over the long Easter holiday weekend, car insurers in Australia are yet to follow their counterparts in the US, which have offered massive refunds due to the significant reduction in traffic crashes there.
CarAdvice contacted three of Australia’s largest insurance companies and received the following responses.
Suncorp – underwriter for AAMI and GIO – claim that, while the COVID-19 situation is being monitored, cars are still subject to other hazards.
“Even with reduced people on the roads at the moment, cars are still at risk from storms, theft, damage while parked and road accidents,” a spokesperson told CarAdvice.
Insurance Australia Group – underwriter for NRMA, Coles Insurance and RACV – issued the following statement: “It is too early to determine any direct impacts on motor claims from the COVID-19 crisis, however we continue to monitor the situation.”
Victorian insurance provider RACV said it has noticed the reduction in driving during the COVID-19 lockdown period has resulted in fewer claims being made, but the company believes there are other factors that contribute to insurance risk.
RACV executive general manager, Motoring & Mobility, Mr Phil Turnbull told CarAdvice, “It is too early to assess the impact on overall claims costs as there are other variables at play, such as the severity of crashes, which tend to worsen with less congestion, leading to increased claims costs.”
All three insurers said they are offering flexible payment plans to policyholders in financial distress.