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Motor insurance premiums and COVID-19 – are you due a rebate or reduction?

Many of us have drastically reduced our car use as a result of the pandemic.

With much of the workforce based at home rather than commuting to the office, and with successive lockdowns preventing the mileage usually driven to see friends or family and to enjoy leisure activities, your vehicle may have been parked up or little used for a long time.

With this in mind, some motorists may well wonder why they are still paying the usual annual premium for their motor insurance since, amongst other factors, insurance premiums are priced on estimates of the mileage you might normally expect to drive in the year ahead, but which are now often completely out of step with reality.

A Which? survey of nearly 2000 motorists found that 76% had seen a reduction in their mileage as a result of Covid-19 restrictions, whilst 49% said their mileage had reduced ‘a lot’.  It was also revealed that the first lockdown resulted in a 75% reduction in car use across the country – yet only 21% of customers were offered a cash rebate or discount by their insurer and only one insurer proactively rebated its customers with a £25 payout to each.

Of course, insurance premiums also cover unused vehicles in the event of theft and damage, but the Association of British Insurers say the average cost of comprehensive motor insurance is now at a four year low and that any premium adjustments and refunds ‘will be a matter for individual insurers’.

So, if you’re one of those motorists whose mileage has been seriously curtailed by the pandemic, but have not yet received a reduction or payout, what can you do to check if you’re eligible for a rebate?

The answer is to get in touch with your insurer without delay.  Let them know how your mileage and car use has been affected by the pandemic.  If you are eligible, your insurer can then make adjustments to the policy and, in some cases, waive their usual adjustment fees. 

Lastly, make a note of when your renewal date is going to fall due and mark it to remind you at least four weeks in advance of renewal to shop around. Recent reports suggest that you are likely to receive a better quote from both your current insurer and when shopping around if you call them before you are too close to the renewal date.

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