Cars Half of drivers are overpaying for car insurance
Covid sees car insurance prices plunge to seven-year low
With fewer vehicles to insure, there is more competition between rivals, bringing down prices, claims reportAccording to research conducted by Money Supermarket, the average cost of fully comprehensive insurance in the UK fell by £73.32 to £417.06 – a fall of 15 percent – in the first quarter of 2021, which represents the biggest quarter-on-quarter drop on record.
Half of all drivers (51 percent) believe they are paying too much for theirnow they cover fewer miles than before the pandemic.
That’s according to the RAC, which said a similar proportion – 50 percent – of motorists are unable to switch to a cheaper policy without being charged.
Thegiant said its poll of 2,100 drivers ‘suggests many are starting to question whether they are being charged a fair price for their ’. It speculated this issue is likely to get worse over time, as 27 percent of those surveyed expect to drive fewer miles in future.
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Of those motorists who feel they are now paying too much for their insurance, 50 percent said they would get charged if they cancelled their current policy to seek a better deal. Three percent said they knew they couldn’t cancel their current policy without incurring an exit fee.
The RAC added that 51 percent have driven fewer miles than they predicted when they bought or renewed their car insurance policy. Also 54 percent of respondents said they find it hard to predict their annual mileage when asked by an insurance company.
‘Uncertainty around travel needs’
“While it remains to be seen how our driving habits change as a result of the pandemic, it seems fair to presume that many of us won’t go back to driving the sort of miles we used to – especially if a degree of home-working becomes the norm,” said RAC head of insurance development, Laura Truman.
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“This shift is clearly prompting drivers to question whether the cost of their car insurance is reasonable. This might partly be because in so many cases motorists are forced to lock themselves into annual insurance contracts, the price of which is partly determined by the policyholder’s estimate of how many miles they’ll cover in a year.
“This is something we know drivers found difficult to estimate before the pandemic but considering all the uncertainty surrounding people’s future travel needs it must now be even harder.”
Ford claims pay-per-mile car insurance saves £300 a year .
Ford has partnered with a pay-per-mile car insurance provider – and says ad-hoc drivers can save £300 a year.Rather than basing its premium on a projected mileage figure, By Miles charges based on the actual distance covered by a motorist, with the data coming from the car’s in-built FordPass Connect modem.