Motor insurance claims fell by 19% in 2020 amid coronavirus lockdowns

The number of motor insurance claims settled by insurers fell by nearly a fifth annually in 2020 as fewer cars were on the roads during the coronavirus lockdowns.

The number of claims settled last year stood at 2.1 million, marking a 19% decrease compared with 2019, the Association of British Insurers (ABI) said.

Total payouts, at £8.3 billion, reduced by 6% compared with the previous year.

The ABI said the declines reflect the impact of the national lockdowns, with reduced road usage.

The overall average value of a claim paid was £4,000, up from £3,400 in 2019. The 17% increase on 2019 reflected rises in average personal injury and vehicle repair cost claims, the ABI said.

During 2020, the average personal injury payout increased by 13% on the previous year to £12,100.

The average price paid for private comprehensive motor insurance was £465 in 2020, remaining at a four-year low.

The ABI said support for motorists during the coronavirus pandemic has included extending until April 30 a pledge that if someone must drive to and from their workplace because of the impact of Covid-19, their insurance policy will not be affected.

There is also a pledge until April 30 that if someone uses their own car for voluntary purposes to transport medicines or groceries to support others who are impacted by Covid-19, their cover will not be affected. This applies to all categories of NHS Volunteer Responders, including transporting patients, equipment, or other essential supplies, as well as volunteers assisting with the vaccine rollout.

Insurers have been discussing with customers any options for adjusting policies and premiums to reflect fewer miles being driven during the lockdowns, as well as options for those concerned about being able to continue paying their premiums by instalments due to the pandemic.

The ABI said one insurer has refunded £110 million to its car and van insurance customers, reflecting fewer journeys made during the lockdowns.

ABI Chair, Jon Dye, reflects on the pass year, highlighting the importance of industry wide pledges to support customers throughout the pandemic #ABIConf21 pic.twitter.com/KKNMP2I7sC

— ABI (@BritishInsurers) February 23, 2021

Laura Hughes, the ABI’s manager, general insurance, said: “Predictably, lockdowns have led to far fewer vehicles on the roads, reflected in the fall in the number of motor claims.

“During the pandemic, insurers have given additional support to their customers, including options for reduced mileage and help for those struggling to pay their premiums by instalments. It is good to see that throughout an uncertain year, motorists continued to get the best deals from a competitive motor insurance market.

“As we edge back to some form of normality, cost pressures remain, such as increasing vehicle repair costs, reflecting ever more complex vehicle technology.”