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Law360, London (July 28, 2020, 6:15 PM BST) -- Motorists paid an average of £460 ($595) for their annual vehicle insurance cover in the second quarter of 2020 with the COVID-19 movement restrictions in part helping drive down prices to 2016 levels, the Association of British Insurers said Tuesday.
According to figures from the ABI's motor insurance premium tracker, the average price paid for comprehensive motor insurance was down by £14, or 3%, compared to the first quarter of this year.
On a year-on-year basis, the average price fell by £9, or 2%, compared to the same period last year, which the ABI said brings it to the lowest level of prices paid since the third quarter of 2016.
"The fall in part reflects the impact of the COVID-19 lockdown with most motorists making far fewer car journeys," said the ABI.
The trade association said its tracker looks at the price consumers pay for their cover, rather than the price they are quoted.
The latest tracker demonstrates that "motorists have been benefiting from reduced road accident frequency during lockdown," said Laurenz Gerger, general insurance policy adviser at the ABI.
Motor insurance businesses have also waived requirements to extend cover for people who want to transport medicines or groceries to help those affected by the coronavirus, the ABI said.
The fall in vehicle insurance comes as motorists face other issues, such as rising bills for repairs, which means that they will "need to continue to shop around to get the best deal for their needs," according to Gerger.
The U.K. enforced a COVID-19 lockdown in March, which banned people from making journeys that were not deemed to be essential or for medical-related purposes.
The pandemic has ushered in sobering news for other sectors of the insurance industry, where businesses are expecting to pay out several millions to policyholders because of COVID-19-related problems.
Many companies have been forced to shut down and events and trips cancelled.
This month, research from Moody's Investment Services said companies around the world that provide insurance cover for events and travel interruptions could be hit with claims of up to €80 billion ($91 billion).
In May, Lloyd's of London said its members will pay out up to $4.3 billion in insurance claims because of the pandemic and warned that the figure could increase if the lockdown continued into the following quarter.
--Additional reporting by Martin Croucher. Editing by Alyssa Miller.
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