Car insurance costs accelerate after COVID slowdown
The temporary easing of coronavirus measures over the summer has brought with it some stability to motor premiums, according to research by data insight specialist Consumer Intelligence.
After tumbling 2.5% in the two months following lockdown in March, the cost of car insurance in the UK is now on a steadier trajectory – rising just 0.1% in the last three months.
However, John Blevins, pricing expert at Consumer Intelligence, predicts pricing will fluctuate until the coronavirus pandemic is over: “Given we are still living in uncertain times and differing isolation rules up and down the country, the effect in claims volumes and severity is not surprising – and we will continue to see fluctuations until we see some sustained normality return.”
Despite the coronavirus ‘speed bump’, prices have now risen 2% in the last 12 months. The average motor premium today stands at £904.
Age differences
Within the 0.1% uptick can be found a mixture of pricing movements. Younger drivers aged under 25 saw a reduction to their premiums of 0.6%, while 25-49-year-olds witnessed an equivalent rise of 0.6%. Those aged over 50, meanwhile, saw premiums slip a modest 0.2%.
The over-50s (3%) recorded the biggest increase to their premiums of any of our age groups in the last 12 months. Motorists aged 25-49 also saw the cost of their car insurance rise, albeit more modestly at 2.2%.
Telematics
Newer entrants, such as By Miles – which has reported a surge in sales amid the pandemic with drivers attracted to its pay-as-you-drive insurance offering – threaten to eat into the market share the telematics sector has built up in recent years. Telematics policies, which are used primarily by younger drivers to keep insurance costs down, now make up just 58% of the five cheapest quotes for drivers aged under 25 – down from 64% a year ago.
Regional differences
London drivers (6.4%) saw the biggest increases to their car insurance policies in the last 12 months. East Midlands (3.9%) and Yorkshire and the Humber (3.8%) followed next, with just the South East (-1.1%) and South West (-0.8%) witnessing price falls over the same period.
