RECENT data pulled by leading comparison site, MoneySuperMarket, found average car insurance premiums fell by £18 during the first three months of 2020, putting the typical cost of an annual premium at £485.

The latest data even showed that April premiums were at their lowest for five years suggesting that due to reduced vehicle usage during Covid-19 lockdown, there have been fewer accident claims. 

Fewer claims has meant some insurers have had to further reduce costs as a result of less people using their vehicles or not using them at all or even offering good will gestures.

On April 20th, Admiral Group announced it would be issuing an automatic £25 refund to all customers with existing car or van insurance policies as recognition to their customers for following government advice and staying at home as much as possible during the lockdown period. 

It advised that the automatic rebate will be applied by the end of May providing the policy was in place as of 20th April 2020.

Another one of the UK’s larger insurers, LV=  also confirmed it will pay out between £20-£50 to car and motorbike policy holders providing they have been financially affected by coronavirus. 

As the lockdown continues, more insurers may feel pressured to follow Admiral’s lead and further reduce costs and it still remains to be seen just how insurers will price premiums in the next quarter.

It is likely once the lockdown is lifted, journeys made by car or van will take weeks or months to return to normal. 

MoneySuperMarket’s research shows the average premium in April 2020 is now at £462, which is the lowest price since March 2015 and though they cannot say for certain there is a link to the coronavirus crisis, it is likely to be a contributing factor in the trend for declining prices in 2020. So is this trend here to stay? 

With the likes of smart technology used in cars and vans today and telematics policies which aid and promote safer driving, it is possible to see a decline in accident claims.

But whilst we’re heading for a future of fully automated driving, premiums in the foreseeable future are likely to be driven by Covid-19 and the impact it has on the when, why and how often we drive.

 

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