Only 1 in 5 drivers recieved a lockdown car insurance refund

Just one fifth of motorists received any refund from their car insurance as a result of 2020’s lockdowns, despite half of them dramatically reducing their mileage.

Data obtained by consumer group Which? shows that 49 per cent of drivers covered significantly fewer miles than usual due to the impact of the coronavirus crisis and associated lockdown.

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Traffic levels fell by up to 80 per cent during the first lockdown and data from TomTom shows congestion dropped 25 per cent across the whole of 2020 as people stayed at home.

Annual mileage is one of the determining factors in an insurance premium but only 21 per cent of drivers received money back from their provider.

Car use fell significantly during 2020 (Photo: Shutterstock)

Only one UK insurer offered a blanket refund to all customers, with Admiral automatically returning a fixed £25 per policy. LV= also said it would refund customers but the value of the refund varied from £20 and £50 and drivers had to apply to have the money returned.

Other insurers said they were helping customers in other ways, such as extending cover for those who have to use their car for work or community volunteering.

Harry Rose, editor of Which? Magazine said insurers needed to make sure they were supporting the one in seven drivers struggling with insurance costs. He said: “Customers will not appreciate it if they feel firms are benefiting at their expense – or if they are being left without support at a time of need.

“Our research shows that many insurance customers are struggling with their premiums as a result of the pandemic, but up to a quarter of these people have received no support whatsoever. Firms should be doing everything they can to engage with and support those who need it most.”

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The Association of British Insurers said that refunds were a matter for individual insurers but pointed out that while the number of claims dropped in 2020 their average cost increased.

An ABI spokesperson said: “ABI’s Motor Premium Tracker shows that the average cost of comprehensive motor insurance is at a four-year low of £460. Our data from ABI members shows that during the first national lockdown, the value of the average claim paid rose by 27 per cent, despite fewer claims.

“During lockdown, it is true that many motorists have used their vehicles less. However, drivers are legally obligated to have insurance for when they do drive as well as to protect against the risks of theft and damage. Insurers have, and continue to give extra support to motorists given the exceptional circumstances.”

One pay-per-mile insurer claimed that the actual value of refunds owned to drivers is £65 and warned that more vulnerable drivers were being hardest hit.

James Blackman, CEO of By Miles, said: “Millions of UK drivers have already overpaid for car insurance policies they’re not using, with the young and the eldery being hit particularly hard. The industry must take measures to make sure these people are getting a fair deal.”

Dan Hutson, head of motor insurance at ComparetheMarket said premiums had dropped but that drivers may have to put in some legwork to get a refund. He commented: “Our data shows that average premiums for motorists have fallen by around £50 since the pandemic began, but these savings are only typically available to those who shop around at the end of their insurance policy. If you already have an insurance policy but are driving a lot less than you expected to, it’s a good idea to be proactive and speak to your insurer since you may be able to get a refund if they consider you pose a lower risk."