Australia’s largest car insurance companies will not offer any partial refunds even though US motorists are set to collectively pocket millions from insurers there because COVID-19 lockdowns have reduced the use of cars and the risk of crashes.
Even though Australia recorded a dramatic reduction in the road toll and in the number of serious crashes over the Easter holiday long weekend, car insurers here are yet to follow their counterparts in the US, who have offered massive refunds due to the significant reduction in traffic crashes there.
News agency Reuters has reported that insurance companies in the US have begun offering refunds or credits to customers – totalling more than US$6.1 billion (AU$9.5 billion) – however Australian insurers are not offering the same partial refunds at this stage.
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.
“There has been a reduction in motor insurance claims in recent weeks,” RACV Executive General Manager Motoring & Mobility, Phil Turnbull told CarAdvice.
“[However] 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 contacted by CarAdvice said they are monitoring the impact on COVID-19 lockdowns on insurance claims, but are also offering flexible payment plans to policy holders in financial distress.
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