UK car insurance companies have saved nearly £1.3bn during the coronavirus lockdown due to a huge reduction in claims, research by hello-safe.co.uk suggests.
The price comparison site's data shows that car insurance claims dropped by 69% between March 23 and May 31, resulting in insurer savings of an estimated £1.289bn.
Payouts would have totalled around £1.859bn in a 'normal' year, but the actual amount paid during the lockdown was around £569m.
There was a 69.4% decrease in car accidents, a 39.8% reduction in deaths caused by accident, and 80.2% fewer vehicle repairs, compared to a typical year.
“With most people stuck at home, their cars have inevitably stayed in the garage,” said Antoine Fruchard, insurance expert and CEO at hello-safe.co.uk.
“Now that the lockdown is over and people are going out again, the number of cars on the road could soon be back at pre-Covid levels.
“However, it is likely that customers will question why they continued to pay such high insurance premiums while they weren’t able to drive.”
Greater London accounts for the highest savings, with an 82% drop in car accidents corresponding with a £204.4m reduction in payouts by insurers.
Insurers enjoyed savings of approximately £78m in Scotland during lockdown, £55m in Wales, and £35m in Northern Ireland.
Car insurance premiums have fallen this year amid driving restrictions, and companies like Admiral and LV have announced refunds for customers.
“It will be interesting to see if all the insurance companies will make refunds,” Fruchard continued.
“Competition between them may be increasing in the coming months, and that means customers should see a slight drop in car insurance premiums.”
Author: Chris Seekings
Image credit: iStock