Car Insurance Claims Fall In 2020

Mon 15th Mar 2021

Motor insurance companies enjoyed a happy pandemic according to new data published which suggests that claims fell by 19 per cent in the last 12 months.

With fewer cars on the roads due to lockdown, settled claims fell to just 2.1 million according to the Association of British Insurers. But while claims fell by 19 per cent, the total cost of payouts did not fall in equal measure, insurers paying out £8.3billion, which is only a drop of 6 per cent.

The government’s own data has revealed that the Covid-19 restrictions on travel contributed to a 14 per cent fall in traffic, and while the cost of a motor insurance premium may have remained at a four-year low, the overall average of a claim rose from £3,400 to £4,000 -  a jump of 17 per cent.

“The pandemic has forced many motorists to change their driving habits,” said Laura Hughes, ABI’s manager of general insurance.

“Predictably, lockdowns have led to far fewer vehicles on the roads, reflected in the fall in the number of motor claims.

“During the pandemic insurers have given additional support to their customers, including options for reduced mileage and help for those struggling to pay their premiums by instalments.

“It is good to see that throughout an uncertain year, motorists continued to get the best deals from a competitive motor insurance market.

“As we edge back to some form of normality, cost pressures remain, such as increasing vehicle repair costs, reflecting ever more complex vehicle technology.”

Despite these huge savings for the motor insurance industry, the consumers did not feel an immediate benefit from being on the road less often. Of the major insurers, only Admiral paid back some of the premium to their customers, refunding a total of £110million to reflect the lack of driving.