10 million drivers could see post-lockdown insurance hike

Thursday, 18th June 2020, 8:00 am
Updated Monday, 29th June 2020, 11:06 am

Millions of drivers could end up paying more for their car insurance as people’s driving habits change in the wake of the coronavirus outbreak.

The easing of lockdown has seen millions of people return to work but the Government is urging commuters to avoid public transport, forcing many to use their car instead.

Several surveys have also found that many more people plan to use their car to commute in order to protect themselves from the virus and insurance experts are warning this could push up premiums.

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According to research by comparison site Compare The Market, the number of people expecting to commute by car has almost doubled since the start of lockdown, from 34 to 61 per cent - equivalent to an extra 10.5 million cars on the daily commute.

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For drivers who previously didn’t use their car for getting to work that could mean a change in policy and an increase in premiums. Anyone with a social, domestic and pleasure (SDP) policy will need to extend it to add commuting (SDP+C), which could bring a rise in costs. Comparethemarket estimates that a typical customer could pay around £20 more for an SDP+C policy.

Dan Hutson, head of motor insurance at comparethemarket.com, said: “The Government is encouraging the UK to get back out to work and to society and, crucially, to avoid public transport where possible. Cars are so important for keeping us protected from the virus but, at a time when households are already financially stretched, being asked to drive more could have a significant hit on finances.

“Motor premiums, which have fallen recently, could be about to jump once more. More drivers will need to adapt their policies to include cover for commuting and insurers may increase their prices in anticipation of more cars, and more crashes, on the road. In addition, higher car usage will also result in a higher fuel bill.”

Comparethemarket.com predicts that the overall cost of car insurance could be set to increase, as nearly a fifth (17 per cent) of UK households think that they will use their car more than they did prior to the pandemic. Premiums are based on a number of factors, including the likelihood of crashes. With more cars on the road, the risk of collisions increases, which could cause motor insurance premiums to rise accordingly.

The findings come at a time when household finances are already stretched. According to comparethemarket.com’s Household Financial Confidence Tracker, nearly a fifth (17 per cent) of UK households are worried about being able to keep on top of household finances due to the economic effects of the outbreak. This figure rises to 24 per cent among families with children at home who are also far more reliant on cars, with 22 per cent likely to use their car more than they did pre-lockdown compared to 15 per cent of those without children at home.