Driving drop-off not reflected in insurance premiums

New research has found that more than half of drivers think they are paying too much for car insurance considering the reduction in miles driven.

Research for RAC Pay by Mile Insurance found that 51% thought their premiums were too high, with 50% unable to switch to a cheaper policy without incurring charges.

Covid-19 has heavily impacted the distances driven, although miles were reducing even before the pandemic; between 2017 and 2020 the number of cars driven fewer than 6,000 miles between annual MOTs rose by six per cent a year. That figure shot up to 35% after Covid-19 struck.

Meanwhile, separate government data shows that in 2019 drivers covered 20% fewer miles than two decades ago.

RAC head of insurance development Laura Truman said: “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. But even without the impact of Covid-19, it’s clear the number of cars covering fewer than 6,000 miles a year has been going up in recent years.

“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.”