The average cost of car insurance has risen by 6% to £809 per year, according to new data from the Confused.com car insurance index. Pay-by-mile car insurer By Miles is calling for insurers to stop overcharging customers, at a time when driving levels are reducing due to the lockdown.
By Miles CEO James Blackham comments:
“These figures highlight the high price Brits are currently being forced to pay for a service they’re not using, with the average price of car insurance rising 6% in the last year. Why should drivers pay to insure miles they are not driving?
“Everyone is forced to make changes during the unprecedented situation we’re living through at the moment – and that should include car insurers. As people are drive far fewer miles while in lockdown, the number of insurance claims due to accidents also decreases – and insurers stand to make in excess of £1bn from this reduction in claims.
Those savings of over must be passed on to the public. Policyholders must be able to request a premium reduction or extra months added onto their policy and we hope to see the next round of figures showing a marked decrease in premiums – anything else isn’t treating customers fairly.
IE Comment; Indeed the difference between North American insurance companies and UK insurers on the issue of car use right now is stark. MetLife, AllState, Geico, Liberty, Chubb and State Farm have all issued statements saying they are refund billions of dollars in car insurance premiums.
Even better for drivers, the refunds are being applied automatically – owners don’t have to apply online, otry to get through to a dispersed and depleted call centre network during the peak of the Corona epidemic. Smart move we say at IE because it demonstrates fair play when the chips are down for many policyholders facing unemployment, illness or worse. When are LV=, Direct Line, Admiral, AXA, Aviva, RSA, NFU Mutual and others going to do the same?
By giving a pro rata refund based on a 12 month policy the insurance industry would take action that would go a long way to rebuilding the trust that has been damaged by rejected Business Interruption and Travel claims recently.
“Pay-by-mile car insurance provides lower mileage drivers with a flexible, more transparent policy. We’re waiving our cancellation fee for new policies sold this month to provide more motorists the opportunity to try our pay-by-mile service and see how it works for them. The less you drive, the less you pay,” added James from By Miles,
“Once the lockdown restrictions are lifted, if customers who have been with us for a minimum of three months need to change policy once they start driving more again – they won’t be charged to cancel the policy. We’ll also refund any days or months of their policy that they haven’t used. We hope this small gesture can help some people bring their monthly outgoings down.”