Car insurance premiums fell to a four-year low in 2020, according to new figures from the Association of British Insurers (ABI). The organisation’s Motor Insurance Premium Tracker, which looks at the price consumers pay for their cover, rather than the price they are quoted, found last year’s average fully comprehensive premium cost £465.
This average price was down one percent on the figure seen in 2019, while premiums during the final three months of the year were down three percent on the same period in 2019. However, winter premiums tend to be more expensive than those seen during the summer, and the final quarter’s average was still two percent higher than the third quarter.
Declining prices have come as traffic volumes fell with the onset of the coronavirus pandemic. After the first lockdown was announced in March, the AA’s research found traffic volumes had crumbled to a fraction of their former levels. In fact, the organisation said levels fell 60 to 80 percent depending on the day of the week.
With people working from home, children out of school and reduced use of public transport, insurers introduced a range of new measures to reflect the changes to modern life. These included a pledge to maintain existing policies even if the Covid-19 pandemic forced you to commute by car – a pledge that was extended until April 30.
New rules have also meant insurers will allow drivers to use their vehicles for voluntary purposes or to support others impacted by the pandemic without changing their policies. This measures, which has also been extended to April 30, includes those who use their vehicle to transport medicines for the NHS or take groceries to vulnerable people.
However, the ABI says drivers should discuss adjusting policies with their insurer for permanent changes, or if they are driving fewer miles than expected as a result of the lockdown. Drivers should also contact their insurer if they are concerned about their ability to continue paying their premiums as a result of the pandemic.
“Despite a year like no other, it is good to see that during 2020 motorists continued to get the best deals in a competitive motor insurance market,” said the ABI’s manager for general insurance, Laura Hughes. “In addition, the extra support that insurers continue to give to motorists during this uncertain and unsettling time is helping drivers adapt to this ‘new normal’.”