The number of motor insurance claims settled by insurers in 2020 fell by 19% to 2.1m according to figures published by the ABI (Association of British Insurers).
Total payouts also reduced by six per cent on the previous year to £8.3bn.
The overall average value of a claim paid was £4,000 up from £3,400 in 2019. According to the ABI the 17% rise on 2019 reflected rises in average personal injury and vehicle repair cost claims.
During 2020 the average price paid for private comprehensive motor insurance was £465, remaining at a four-year low.
Figures for Q4 2020 highlighted that the number of claims settled fell by 13% on the previous quarter to 468,000, a trend usually witnessed during the quarter with fewer vehicles on the roads over the Christmas break.
Laura Hughes, ABI’s Manager, General Insurance, said: “The pandemic has forced many motorists to change their driving habits. Predictably, lockdowns have led to far fewer vehicles on the roads, reflected in the fall in the number of motor claims. During the pandemic insurers have given additional support to their customers, including options for reduced mileage and help for those struggling to pay their premiums by instalments. It is good to see that throughout an uncertain year, motorists continued to get the best deals from a competitive motor insurance market.
“As we edge back to some form of normality, cost pressures remain, such as increasing vehicle repair costs, reflecting ever more complex vehicle technology. With the average personal injury claim rising last year, the advent of the whiplash claims portal in May should help control whiplash costs, while ensuring that proportionate compensation is paid to genuinely injured claimants.”
These latest figures come after an unprecedented year for insurance customers, with motor insurers providing extra help to the UK’s 27 million private motorists during the pandemic, including:
• Extending, until 30 April, the current pledge that if you must drive to and from your workplace because of the impact of Covid-19, your insurance policy will not be affected.
• Also, similarly extending until 30 April the pledge that if you are using your own car for voluntary purposes to transport medicines or groceries to support others who are impacted by Covid-19, your cover will not be affected.
• Discussing with customers any options around adjusting policies and premiums to reflect fewer miles being driven, as well as options for those concerned about payments.
• One insurer refunding £110m to its car and van insurance customers reflecting that they had driven less during the lockdowns.
