Car insurance claims plummet in wake of lockdown

Tuesday, 16th March 2021, 10:06 am
Updated Tuesday, 16th March 2021, 10:06 am

Car insurance claims fell by almost a fifth last year as the lockdown had a dramatic effect on travel levels.

Figures from the Association of British Insurers (ABI) show that there were 2.1 million motor claims settled in 2020 - 19 per cent lower than the previous year, reflecting the drop in the number of journeys taken and miles travelled by motorists.

The total paid out was also lower - at £8.3 billion - but the figures show that the average value of a claim rose by 17 per cent from £3,400 to £4,000. The ABI said that the growing complexity of repairs was partly to blame for the rising insurance bills along with personal injury claims, which jumped 13 per cent to £12,100.

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During the first UK lockdown traffic levels fell by as much as 80 per cent and have dropped again in early 2021 as the country remains under tight restrictions.

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Laura Hughes, ABI’s manager of general insurance, said: “The pandemic has forced many motorists to change their driving habits. Predictably, lockdowns have led to far fewer vehicles on the roads, reflected in the fall in the number of motor claims.

“As we edge back to some form of normality, cost pressures remain, such as increasing vehicle repair costs, reflecting ever more complex vehicle technology. With the average personal injury claim rising last year, the advent of the whiplash claims portal in May should help control whiplash costs, while ensuring that proportionate compensation is paid to genuinely injured claimants.”

The ABI data also showed that the average car insurance premium cost reached a four-year low at £465 for fully comprehensive cover.

However, just one in five drivers benefitted from a refund due to reduced mileage during the year and motorists are being warned that not all renewal quotes reflect the changed motoring landscape.

Claims dropped as the number of cars and miles travelled reduced during lockdown (Photo: Shutterstock)

Louise O’Shea, CEO at Confused.com, commented: “Almost two in three (60 per cent) UK drivers have been using their car less since being in lockdown, according to our research. We also found that UK drivers expect to drive nearly 2,000 fewer miles this year compared to last year.

“But savings are only being seen by people who are shopping around. We know that insurers are still putting up renewal prices for some drivers. Even if the increase is small, please don’t settle for this as there will be an insurer out there willing to offer a better price.”