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Summary
- The insurance industry has decided to extend support to home insurance and motor insurance products till 19 March 2021.
- The insurance industry had recently lost a test case in a bid to avoid business interruption insurance claims in the wake of the pandemic.
The probability of coming out of the adversities caused by the pandemic is getting stronger on the backdrop of a potential Covid-19 vaccine. Amid the positive sentiment of the mass vaccination, the insurance industry has decided to extend support to home insurance and motor insurance products yet until 19 March. The pledge was earlier due to end on 31 December.
The apex trade body, Association of British Insurers (ABI), believes that offering extension across insurance products could help nearly 27 million motor insurance and 17 million home insurance customers across the UK.
What is there in the pledge?
- Work from home: The coverage of home insurance policies will remain unaffected for people who are working remotely from their homes in the wake of the pandemic. This means that the policyholder’s home insurance cover will not be affected until March. The policyholders are not required to contact insurers for policy extension.
- Motor insurance: The motor insurance buyers are not required to contact insurers for policy extension during the period. The insurance buyers would fall into the category of the people who drive to and from their workplace due to Covid-19 impact.
- Others: Policyholders who are volunteering to help in shipping medicines or essential items through their own means of transport in the wake of the pandemic are expected to benefit from the insurer’s pledge.
The pandemic has brought in significant disruption across sectors. The extension to these temporary pledges will help many policyholders to sustain themselves through the crisis.
The policyholders need not contact their insurers to update their documents unless they have bought a new home or car. But they might have to inform the insurers in case they make major changes in their working-from-home or driving patterns.
The social distancing measures are expected to last for some more months, and people have to rely on their own means of transport. The extension will help the motorists immensely.
Also read: UK Insurers Back Down on Coronavirus Policy Dispute
The insurance industry recently lost a test case in a bid to avoid business interruption insurance claims. However, it did pay more than £1.8 billion in Covid-19 related claims. Moreover, the industry donated more than £100 million in Covid-19 Support Fund to help the vulnerable sections of the society.
Notably, the insurance industry is considering launching a second test case to avoid paying hundreds of millions of dollars against business interruptions.
Also read: Lloyd's Of London Expects £5 Billion In Insurance Pay-Out for The Year
The dynamic situation of coronavirus cases has led to the extension of insurer’s pledge that is expected to benefit the insurance buyers in a significant manner. Though nothing much can be said about how the situation might unfold beyond March.
