By Miles PAYG insurance is winning over many UK customers as we head into Lockdown Part Two. Here’s a case study from the disruptive insurance brand;
Alan Bruford, 68, Accountant:
- Quote from previous insurer – £804 per year, with a monthly cost of £67.
- With By Miles pay-by-mile policy, annual cost expected to be £506.62 (with 8,000 mile estimate), last monthly bill £30.
“I knew about the pay-by-mile policies from By Miles for many years, as my wife’s had a policy and it’s worked well for her. After I got a renewal quote for £804 to insure my Mercedes with another traditional car insurance provider (an £80 increase on my previous year), I decided to shop around.
“I’d been with my old car insurer for the last three years or so, and despite having no claims, my renewal quotes had crept up each year. I know this sort of approach to pricing happens in the insurance industry. I think it’s poor and it doesn’t reward loyalty at all, and I think it’s excellent that the Financial Conduct Authority is doing something about it and loyalty will be rewarded moving forward.
“I was aware that during the months of lockdown, I was also driving a lot less due to the restrictions so By Miles made sense for me. I’d be set to save in a normal year compared with my renewal quote, but with my lack of driving in 2020, I could end up halving the cost of my car insurance for the year.
“I’d expect to normally be driving around 10,000 miles each year, so I wouldn’t previously describe myself as a low mileage driver, but due to all the time spent in lockdown this year, I’m expecting to drive a maximum of 8,000, probably even less.
“The new Liverpool local lockdown restrictions restrict travel in the whole Merseyside area, including all of Liverpool and the surrounding region, so everyone’s mileage is restricted. As Liverpool is classed as a very high risk area, you’re not allowed to drive out of that area and Wales aren’t planning to let anyone cross their border either.
“I think the effect is going to be quite severe. It’s not technically unlawful to leave the area, but it’s against the best advice – you can only travel for work or health purposes. “I’m particularly glad to be on a pay-by-mile policy now, as I won’t be paying for miles I’m not driving during lockdown.
“I like the simplicity of the app and the device. I use the app to monitor my costs and mileage. Even if I do 1000 miles a month, I’m only getting a bill for £30. It’s amazing.”
James Blackham, CEO of pay-by-mile car insurance provider By Miles says:
“Ahead of the second national lockdown of the year, we’re calling on car insurers to do the right thing by their customers by proactively offering refunds to account for the reduction in claims over the next month.
“Earlier in the year, we saw the numbers of claims plummet as drivers followed Government advice and stayed at home, saving car insurance companies over £1 billion in claims payouts. We expect the same to happen in the coming weeks.
“Many drivers have seen their mileage drop steeply from the estimates they gave their insurer at the start of their policies. As the country enters another phase of national lockdown this becomes even more important, with the initial 4-week lockdown period likely to dramatically change driving habits.
“It’s simple – If you are driving less, you’re far less likely to make a claim. We saw a few insurers offer automatic refunds to all customers to account for changes in driving habits earlier in the year – these insurers should be doing so again, and others should follow suit.
“Many people have already suffered months of financial hardship and are now facing yet another period of uncertainty. It’s only fair that savings are proactively passed on to drivers, without the need for hours spent on the phone line with customer services.
“If your insurer has not yet provided information on refunds, I encourage you to contact your insurer to update them with a new mileage estimate based on your current circumstances, and to request for your annual insurance premium to be recalculated.”
By Miles advice for motorists who feel they may be overpaying on their car insurance:
Fortunately, there are simple steps drivers can take right now to reduce their premiums.
- Contact your insurer to update them if you are driving less and ask to have your premium recalculated. Insurers should be waiving admin fees for these types of policy changes, making it easier to see if you could save.
- Look at changing the vehicle usage listed on your policy, if you currently pay for ‘business use’ but no longer drive for work you may be paying an additional premium to cover ‘commuting’ or ‘business use’.
- If you are barely driving, consider cancelling your insurance and declaring your vehicle off-road via a SORN (Statutory Off Road Notification).
- If you’ve seen your mileage fall to below 7,000 miles a year, consider looking at pay-by-mile insurance, which is a fairer and more flexible option.
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