Customers of at least one Australian car insurance company are set to receive a partial refund after a reduction in the risk of crashes following the coronavirus lockdowns.
While three of Australia's largest car insurance companies – Suncorp, IAG and RACV – are yet to pass on any savings, the standalone insurance company Youi – which says it provides coverage for approximately one in 20 cars across all Australian states and territories – will offer discounts of 15 per cent for the next three months.
The initiative – which is available from today for customers wishing to opt-in online or over the phone – will be available to new and existing policy-holders who are driving their cars less due to restrictions imposed for non-essential travel during the pandemic.
“Given the decline in driving at the moment, premiums can be lower,” Youi CEO Mr Schreuder said.
Based on CarAdvice's calculations, new customers taking out comprehensive insurance on a 2020 Toyota Corolla – Australia's best-selling passenger car – with Youi in Sydney could see a saving of approximately $90 ($30 per month for pay-by-the-month instalments) on a policy that costs $2400, or approximately $75 ($25 per month) on a $2000 policy paid yearly after customers have contacted the company and opted-in.
For existing Youi customers, a partial refund is also available over the same three-month period. This would amount to a saving of approximately $28 over the three-month period on a policy that costs $750 annually, according to figures supplied by the company.
CarAdvice understands the offer will be reviewed as situations change, with the possibility of an extension beyond the current three-month trial period.
The Youi announcement follows news out of the US that its largest vehicle insurers are refunding or crediting more than AU$10 billion combined to policyholders who are not using their vehicles as much due to COVID-19.
However, as reported exclusively by CarAdvice yesterday, the major Australian providers of car insurance are yet to follow suit.
Suncorp – underwriter for AAMI and GIO – told CarAdvice yesterday that, while it is monitoring the effects on traffic crashes during COVID-19 lockdowns, there are still hazards for cars even if they are not being driven as much.
“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 Suncorp spokesperson said.
Insurance Australia Group – underwriter for NRMA, Coles Insurance and RACV – told Caradvice: "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 provider RACV acknowledged a reduction in traffic and claims during coronavirus travel bans, but stated there are other factors contributing to how insurance risk is calculated.
“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.”
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