Settled car insurance claims fell by 19% in 2020 due to falling number of vehicles on the road

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Settled car insurance claims fell a fifth last year due to fewer vehicles on the road - with the cost of cover remaining at four year low

New figures have revealed car insurance claims fell by 19% to 2.1m in 2020 Total payouts also came down by 6% to £8.3bn  The reduction is due to the lower number of the cars on the road  

By Grace Gausden For This Is Money

Published: 02:56 EST, 12 March 2021 | Updated: 03:49 EST, 12 March 2021

The number of motor insurance claims settled in 2020 reversed 19 per cent to 2.1million, new industry body research has revealed.

This fall reflects the fact there were significantly fewer journeys made by car in the past year, according to the Association of British Insurers.

Total payouts came to £8.3billion, which is a reduction of 6 per cent when compared to the previous year.

However, the average personal injury pay out rose 13 per cent on the previous year to £12,100.

The number of motor insurance claims settled by insurers in 2020 fell by 19% to 2.1million

During the same period, the average price paid for private comprehensive motor insurance remained at a four-year low. 

The research also showed the number of claims settled fell by 13 per cent on the previous quarter to 468,000.

The number of claims usually falls in this quarter with fewer vehicles on the roads over the Christmas break.

Figures from Government also show a 14 per cent fall in road traffic in the year to June 2020.

Meanwhile, the overall average value of a claim paid came in at £4,000, up from £3,400 in 2019.

This is a 17 per cent rise on 2019, reflecting a rise in average personal injury and vehicle repair cost claims.

The cost of car insurance remained low during 2020 with the average price paid for private comprehensive motor insurance at £465, remaining at a four-year low.

Laura Hughes, ABI's manager of general insurance, said: 'The pandemic has forced many motorists to change their driving habits. 

'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.

Help: There has been extra support from car insurers for motorists during the pandemic

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

Extra support from motor insurers to customers during the pandemic include extending, until 30 April, the current pledge that if you must drive to and from your workplace because of the impact of Covid-19, your insurance policy will not be affected. 

Similarly, extended until 30 April, insurers have pledged that if you are using your own car for voluntary purposes to transport medicines or groceries to support others who are impacted by Covid-19, your 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.

Drivers do not need to contact your insurer to update your documents or extend your cover. 

Insurers have also promised to discuss with customers any options around 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.

Admiral has gone a step further and refunded £110million to its car and van insurance customers reflecting they had driven less during the lockdowns.

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