Admiral car insurance customers receive £25 automatic refund

Admiral is giving all of its car and van insurance customers an automatic refund of £25 each, a total return of £110million.

Britain’s biggest car insurer says it is refunding its customers in recognition of the fact that there have been fewer cars on the road during the lockdown and it expects this to result in fewer claims.

The £25 refund will be automatically given to all customers for each car and van covered with Admiral as of 20 April, covering a total of 4.4million vehicles, adding up to £110million. 

It said it settled on £25 based on the early estimates of savings made as a result of reduced claims.

It claimed this is the main driver of the saving but there are other factors it’s taken into account including the expectation of an increased average cost of claims and the cost of moving 5,000 staff to work safely from home.

Cristina Nestares, chief executive of UK insurance at Admiral, said: ‘This is an unprecedented time when people across the country are driving significantly less than before the lockdown, and we expect this to lead to a fall in the number of claims we are seeing.

She adds: ‘The Admiral stay at home refund was launched to recognise the considerable efforts people are making by staying home as much as possible and as a result driving less.’ 

Admiral will be in touch with customers in the coming weeks to explain how it will refund them.

It added that it is also waiving any motoring claims excess fees for NHS or emergency service workers and supporting NHS volunteers by guaranteeing cover for customers using their vehicle to transport people, deliver medical supplies and equipment, or items to people who are self-isolating.

Nestares said: ‘There may be fewer cars on the roads at the moment, but for many NHS and emergency services workers their cars are vital for them to get to work. 

‘At the best of times it’s stressful if you’re involved in an accident, so we’ve implemented new measures to take some of the pressure off and ensure they can stay on the road.’

While a £25 refund is nothing to be sniffed at, some customers have questioned why the amount was not worked out proportionally to how much they are paying for their premiums.

Additionally, when taking the average car insurance premium of £809, according to recent figures by comparison website Confused, and seven weeks out of 52 – which is currently how long Britain has been affected by the coronavirus outbreak – this works out as 13.5 per cent of £809, a total of just over £109.

This is more than four times as much as the £25 offered by Admiral.

However, Admiral said it ‘wanted to make the refund fair and considered a number of options.’ 

It added it wanted customers to have an equal share of the savings and a flat sum of money was the simplest and therefore, the quickest, way to give the money.

When asked if the amount could go up if lockdown is extended, a spokesperson said: ‘There are still a lot of uncertainties and no one knows how long this lockdown will last or the ultimate impact on claims activity. 

‘We’ve taken this step to refund £110million based on our best estimate of the amount we would save compared to claims that would have otherwise been made.

‘In addition we’ve already reduced our prices, we will continue to review and make a decision on what further needs to be done, including further changes to our pricing for new and existing customers.

‘It is not our intention to profit from the lockdown and we are returning our best estimate of the savings to customers.’

The decision has been praised by some customers who have taken to social media to share their thoughts on Admiral:

What are other insurers doing?

This is Money contacted other major British car insurers to see if they would be following in Admiral’s lead and issuing refunds to customers.

We will update this page as insurers respond.  

Axa didn’t say if it was going to refund customers but said it had changed some of its policies to reflect the ongoing situation. 

A spokesperson for Axa said: ‘Customers can reduce their mileage during lockdown via their online accounts, which could have a positive impact on their premiums depending on their circumstances.

‘If they decide to make a Statutory Off Road Notification and cancel their motor policy, we will waive the cancellation fee. 

‘For people facing financial difficulties because of Covid-19, we can also arrange a payment holiday; they should call us to discuss the particulars.’

It added that key workers who now commute by car instead of public transport don’t need to change their policy and it has extended their cover. 

‘It has also done the same for volunteers who use their vehicle to transport patients or deliver food or medicine.

For motor repairs, it is giving priority to NHS and essential services vehicles.