Car insurance prices at lowest level for four years as experts warn to ‘shop around’ now
Car insurance agreements have hit their lowest level since quarter 3 in 2016 as the effects of the coronavirus pandemic hit the market. Average policy prices have fallen by £9 or two percent year on year in a major decline.
Costs have also fallen over the course of this year with car insurance down £14 or three percent when compared to the first quarter of the year.
Data from the Association of British Insurers (ABI) looks at the price consumers pay rather than the price they are quoted.
The agency says the fall reflects the impact of the lockdown with drivers making fewer car journeys over the past few months.
This has seen their overall perceived risk decline meaning their overall premiums are also down when compared to normal levels.
Laurenz Gerger, ABI General Insurance Policy Adviser said their research clearly revealed drivers were “benefiting” from reduced road accidents during the lockdown.
He said the decline was down to “extra support” given to motorists by car insurance firms.
But he warned drovers still needed to shop around to get the best deal for their individual needs despite the cost reductions.
Mr Gerger said: “Our latest motor premium tracker clearly shows that motorists have been benefiting from reduced road accident frequency during lockdown.
Car insurance prices increased for motorists in this age range [ANALYSIS]
Car insurance could be cheaper by going to insurers [INSIGHT]
Car Insurance prices have dramatically fallen [COMMENT]
“In addition to the average premium falling to the lowest level in years, motor insurers have provided extra support to their customers by waiving any requirements to extend cover for millions of workers who may need to drive to different locations.
“[As well as] people who want to help their communities by transporting medicines or groceries to support those affected by Coronavirus.
“However, continued cost pressures, including rising repair bills and the delay in introducing personal injury reforms, mean that motorists will need to continue to shop around to get the best deal for their needs.”
Earlier this month, motoring security experts Safe revealed insurance firms had saved £1.3billion since lockdown began as claim rates fell.
The giant savings equate to an extra £47 per motorist in a major pay day for companies at road users expense.
Prices may be declining for some new policyholders as a result of the pandemic but those on existing policies are not affected.
Those who have not renewed during the length of lockdown would have continued to pay their premiums at the same rate as before despite using their vehicle less.
It means many drivers could be paying for more cover than they are actually using, especially those who are working from home.
Only a handful of car insurance firms have offered to pay any refunds to drivers with others opting for other financial measures to help struggling drivers.
Admiral has offered all customers a £25 refund while LV has offered money back only to those struggling the most financially.
Anthoine Fruchard, insurance excerpt at Safe said car insurance customers “will question” why they continued to pay high costs over the past few months.
However, he predicted competition between firms would increase over the coming months which could see further declines in premiums.
He said: “With most people stuck at home, their cars have inevitably stayed in the garage.
“However, it is likely that customers will question why they continued to pay such high insurance premiums while they weren’t able to drive.
“It will be interesting to see if all the insurance companies will make refunds.
“Competition between them may be increasing in the coming months, and that means customers should see a slight drop in car insurance premiums.”
Source: Read Full Article