Over 50% of UK drivers think they are spending too much on car insurance now they drive less

An empty motorway

June 25, 2021

A new survey by the RAC has found that motorists are beginning to question whether the price they pay for car insurance is “reasonable” as they are driving much less than usual due to the pandemic.

Car insurance customers have found themselves “locked in” to annual policies and are not driving anywhere near the amount of miles they initially predicted. The RAC has warned that the uncertainty caused by the COVID-19 pandemic and subsequent lockdowns has got drivers thinking about their policies.

A survey of over 2,000 drivers conducted by the RAC found that more than half of them think they are paying too much for their car insurance policy given how little they have been driving over the past year.

The survey also found that 50% of drivers were unable to switch to a cheaper car insurance policy based on their lesser mileage without being charged a cancellation fee. Only 3% said that they could cancel their current policy without incurring an exit fee of some kind.

Further analysis from the RAC also suggested that many motorists were likely paying more for their car insurance than they needed to. Even before the pandemic, 42% of drivers said they were not satisfied with the price of their car insurance premiums compared to their actual mileage.

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RAC Head of Insurance Development, Laura Truman, said that even before the pandemic, estimating annual mileage was difficult, but now it has been made even harder.

Ms Truman said: “While it remains to be seen how our driving habits change as a result of the pandemic, it seems fair to presume that many of us won’t go back to driving the sort of miles we used to.

“Especially if a degree of home-working becomes the norm.

“But even without the impact of Covid-19, it’s clear the number of cars covering fewer than 6,000 miles a year has been going up in recent years.

“This shift is clearly prompting drivers to question whether the cost of their car insurance is reasonable.

“This might partly be because in so many cases motorists are forced to lock themselves into annual insurance contracts.

“The price of which is partly determined by the policyholder’s estimate of how many miles they’ll cover in a year.

“This is something we know drivers found difficult to estimate before the pandemic but considering all the uncertainty surrounding people’s future travel needs it must now be even harder.”

The new study by the RAC comes just a few months after MoneySuperMarket claimed that average car insurance prices had reached a seven-year low as motorists across the country drove their cars less.

The average cost of comprehensive car insurance currently stands at £417 – the lowest since 2014.

However, the group warned that prices are likely to rise again this summer - meaning many drivers are at risk of paying higher rates.

Andy Teasdale, car insurance spokesperson for MoneySuperMarket said: “It is great to see these savings being passed onto customers.

“However it is likely the bubble will burst at some point as lockdown eases and driving – as well as accidents and claims – start to rise again.”

Car insurance refund - Can I get money back for driving less?

The answer to this question will depend on who your insurer is.

For example, Admiral is one of the few UK insurance companies to have provided all their customers with a £25 refund for driving less during the pandemic, while Direct Line has a 'Mileage MoneyBack' feature you can sign up to which allows you to get back 2% of the cost of your car insurance for every 1,000 miles under the estimated annual mileage you gave when taking the policy out with them - you'll get this back when your policy ends.

If you have been driving significantly less than your estimated mileage due to Covid-19, be sure to contact your insurer to see if they'll offer you a refund - don't wait for them to call you and don't expect to get a rebate either, as all insurers have different terms due to the uncertainty of the pandemic.

If your situation has changed due to Covid-19 and you know you'll be driving a lot less in the future, be sure to change your mileage when it comes to renewing your policy or switching providers when your cover ends, and ensure it is as accurate as possible.

If your car insurance renewal is due soon, you might want to switch providers to save up to £300 - or if you find a cheaper quote online for exactly the same cover, you could call your existing provider to see if they'll match or beat it - don't settle for your auto-renewal quote! Make sure you do this around 3-4 weeks before your renewal date.

Get a free, no-obligation quote with Bobatoo today or read our related guides below for more money-saving and car insurance tips:

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