Saturday , July 11 2020

Car insurance UK: 10 million motorists set for sudden price increase as traffic rises

Car insurance policies may increase by around £20 for many drivers who will need to add a commuting policy to their agreement. Research by Compare the Market has revealed 61 percent of drivers expect to commute by car to their jobs even after restrictions have been fully eased.  

He 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.”

He warned insurance firms may even decide to increase their prices even further as more drivers use their vehicles. 

An increase in commuters using their cars will result in traffic levels increasing which may lead to more crashes than ever before. 

The increase in overall road risk could force insurance providers to push up costs to keep up with a potential rise in claims. 

Mr Hutson urged motorists to shop around for the most competitive car insurance policy to save money where they could. 

He said: “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. 

“At a time when money is already tight, it’s important that motorists look to save money where they can and shopping around for the most competitive policy remains the best way to do so.” 

Under guidance from the Association of British Insurers (ABI), key workers who need to travel to a place of work under lockdown do not need to extend their cover to use their vehicles. 

This could mean many motorists do not need to secure a commuting policy just yet until all restrictions have been lifted. 

The ABI guidance says: “If your work is critical to the national response to Covid-19 and you need to use your own car to drive to different locations for work purposes because of the impact of Covid-19, your cover will not be affected. 

“You do not need to contact your insurer to update your documents or extend your cover.”

The Financial Conduct Authority (FCA) has also introduced a range of measures to help those affected financially by the coronavirus pandemic 

They have urged firms to offer payment holidays of up to three months for those that need support while providers should be offering different products to customers who may benefit from changes to their agreements. 

Cancellation and adjustment fees have also been waived across many firms while some have even offered refunds or documents to help those most affected. 

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