The number of motor insurance claims settled by insurers fell by almost a fifth in 2020 as lockdowns saw traffic levels fall. That’s the conclusion drawn from data provided by the Association of British Insurers (ABI), which also showed a drop in the total value of payouts.

The organisation said the 19-percent reduction in claims was “unsurprising” given the reduction in traffic during a 2020 in which normality was shattered by the coronavirus pandemic. According to the AA, the first few weeks of lockdown saw traffic levels fall by between 60 and 80 percent depending on the day.

And with claims down, the total value of those claims was also down, albeit at a much lower rate. Insurers dished out £8.3 billion to settle claims last year, down just six percent on 2019’s figure. That meant the industry saw a 17-percent increase in the average value of each claim, which the ABI blames on rising vehicle repair costs as cars become more complex.

Mechanic taking notes under a car

Another contributory factor was the increase in personal injury payouts. During 2020, the average personal injury payout cost insurers £12,100 – up 13 percent on the figures seen in 2019. It’s a figure the ABI expects to fall in the coming years as a new claims system arrives in May.

Thanks to the reduction in claims and the lower overall value of payouts, however, the insurance companies dropped their prices in 2020, with consumers seeing a reduction in the average premium. Across the year, the average price paid for private, fully comprehensive motor insurance was £465 – the lowest level for four years.

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

Driver suffering from whiplash after traffic collision