Like many of us, when lockdown happened, you may have contacted your car insurance company to reduce your annual mileage on your policy. Or perhaps you’ve had a car insurance renewal during that time, and trimmed back your mileage accordingly. Why wouldn’t you? And we bet you thought that would reduce your premium, right?
New research shows that those who are driving fewer than 7000 miles per year are being penalised, not rewarded by insurance companies.
And the news is even worse if you happen to be added 25-29. If you’re clocking up between 6,000 – 7,000 miles annually, you may be paying up to £239 more for your car insurance policy than those in your age bracket who are driving double that amount.
According to the latest data, the average annual distance driven is 7,090 miles. Probably a bit less during lockdown. But if you’re clocking a lot less than that, the truth is that you are paying towards covering the costs of the policies of drivers with a much greater annual mileage. This is because car insurance companies spread the costs of cover across all their customers to keep policy costs affordable for those who are racking up the mileage.
Drive between 5,000-6,000 miles each year? You may be paying up to £215 more each year than those who are doing double the distance.
Yes, if it isn’t bad enough that many insurers failed to offer any rebate to their customers despite a massive reduction in accident pay-outs during the lockdown and it often being more expensive to stay loyal to an insurance company than to shop around each year, now the humble motorist is also being hammered for the cost of other people’s extra miles.
If that wasn’t bad enough, perhaps unsurprisingly, the numbers show that the more miles someone drives, the more likely they are to have an accident. Yet those in the 11-12,000 annual mileage bracket are paying the least.
And it’s not just the young who are being hit with these extra premiums. If you’re in the 40-49 age bracket, you are possibly paying an average of £150 each year if you’re only clocking up 5-6000 miles each year.
Industry leaders are calling on the car insurance industry for greater transparency in their pricing and to abolish this low mileage policy, but so far, insurance companies have been slow to act. And it isn’t as though you can just exaggerate your miles, as the actual mileage you do is logged on your MOT and listed on your vehicle records. Being dishonest could invalidate your policy.
We don’t have the answers, but we are watching this closely in the hope that someone makes a move to change this and forces others to follow suit.
In the meantime, you can be sure you are getting the best price on your annual car insurance policy by using our free quote tool, for instant quotes direct to your inbox. It takes minutes and could save you a packet.