Car Insurance Bills 'Remain At Four-Year Low' During Crisis

By Irene Madongo
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Law360, London (October 29, 2020, 12:54 PM GMT) -- The average price that drivers are paying for their motor insurance cover in the third quarter was £460 ($595), the lowest in four years, as motorists benefited from fewer crashes and accidents on the roads despite lockdown restrictions easing, the Association of British Insurers said on Thursday.

The £460 price tag is the average figure paid for comprehensive motor insurance from July to September of this year, which was the same price for the second quarter, according to the association. It is also £8 lower than for the same three months last year.

The trade body's figures are taken from its Motor Insurance Premium Tracker, which looks at the price consumers pay for their cover, rather than the price they are quoted. 

"While lockdown restrictions eased and road traffic rose during the period, our latest premium tracker shows that motorists continued to benefit from fewer road crashes and a very competitive market." Laura Hughes, manager of general insurance at the ABI, said.

Insurers said this month that they would extend support for motorists and home-insurance policyholders for another three months.

Insurance companies are relaxing their rules so that policyholders who drive to work because of the COVID-19 outbreak do not need to contact their motor cover provider until the end of the year about updating or extending their cover, according to the ABI.

The concession also applies to people who use their vehicles for voluntary purposes, such as picking up groceries for those affected by the virus.

Regulators have looked into how the insurance sector can help during the pandemic. This month, the Financial Conduct Authority put forward measures to protect policyholders who remain in financial difficulty amid the coronavirus crisis.

The FCA proposed including a requirement for insurance companies to re-assess the risk profile of clients to establish whether they are eligible for lower monthly repayments. The watchdog also urged insurers to offer clients help to avoid their cover being canceled altogether.

The insurance sector has not had an entirely smooth ride during the pandemic.

In September, the High Court ruled that insurers should have to pay out on claims to approximately 370,000 businesses that had to shut down during the lockdown. The decision in the case, which was brought by the Financial Conduct Authority, is being appealed at the Supreme Court.

--Additional reporting by Lucia Osborne-Crowley. Editing by Ed Harris.


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