What to do when your coronavirus insurance payment holiday has ended

If you took out an insurance payment holiday because of the coronavirus outbreak and its now come to an end, it’s important to understand what happens once the payment holiday is over and what options are available to you if you’re still struggling to make payments.

What happens when your payment holiday is over

Once your holiday is over, your payments will start again automatically. This means it’s important you know what date these payments will start again.

Any missed payments will be added to your outstanding balance, which means your monthly payments will be higher. So, it’s important you budget for this.

If you’re still going to struggle to make your insurance payments after the holiday, it’s important you get in touch with your insurance provider as soon as possible.

If you’re still experiencing financial difficulties because of the coronavirus outbreak, you might still be able to apply for a payment holiday, also known as a payment deferral, under certain conditions.

If you’ve already agreed a payment holiday of less than six months, this can be extended up to a maximum of six months.

If you’ve already agreed a payment holiday of six months, you will not be able to get another extension. If you’re still struggling to pay after your payment holiday, you should contact your provider as soon as possible. There will still be options available even if you can’t take out another payment holiday.

The Financial Services Authority (FCA) is still discussing the details with lenders, so you should not contact your lender yet. This page will be updated as soon as there is more information.

What options might your provider consider

Moving you to a cheaper policy

If your insurance needs have changed, your insurer might be able to move you to a cheaper policy.

Your insurer might choose to waive fees for switching policy. However, the total cost of your new policy, including interest and fees, cannot be more than your existing policy.

Spreading payments out over a longer period

My extending the length of time you have to pay for your insurance policy, your monthly repayments will be reduced.

For example, if you took out a three month payment holiday, your insurer might offer to extend your payment term by three month. This would keep your monthly repayments the same as they were before, but you would be paying it off over a longer period.

Rescheduling the payment date

If it will benefit you, your lender can change your payment due date. For example, to just after you get paid.

Waiving fees for missed payments

If you’ve missed a payment after your payment holiday ended, your insurer might waive and fees for missed payments.

If you’re financial situation gets worse

Contact your insurance provider as soon as possible to discuss your options.

Make an emergency budget

If you’re worried about cashflow, have a look at what you’re spending and what income you have coming in.

Our Budget planner will help you do this

Look at how to cut your household bills, such as switching providers for your gas, electricity or mobile phone contracts.

Our My Money section has useful tips.
Find out how to save money and increase income to help you catch up with your payments on the StepChange website.

Next steps if you have missed a payment

If you have missed a payment contact your lender to explain your situation. You should avoid taking out more credit unless you know you can afford to pay it back.

This StepChange guide Insurance debt: What to do if you’re in arrears explains what you can do and the implications of not keeping up with certain types of insurance.

When to get debt advice

If you’ve already missed payments and are not able to come to an agreement with your lender, it’s best to get advice as soon you can, especially if you’ve got other debts as well.

See our guide on how to prioritise your debts to help you work out which ones to pay off first.
Find out more on the StepChange website about how debts are collected when you are in arrears.
Citizens Advice have more information about how to make a plan to pay your debts.
Find free confidential debt advice online, over the phone or near to where you live using our debt advice locator toolopens in new window.

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