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Want to save money? If so, get your car insurance premium recalculated if coronavirus lockdown restrictions mean you drive less than expected, an industry insider argued. James Blackham, Chief Executive Officer of insurance firm By Miles, therefore claimed you might have an ‘opportunity’ to save while the pandemic runs its course and movements are restricted. Let us ponder why.
How car insurance premium is calculated
In part, your premium is defined by how likely you are to make a claim for collision, theft, etc. The higher the probability the higher the premium. The insurer considers many factors when making this assessment. They include your: age, experience, postal address, the type of vehicle, driving licence endorsements, and job. Your estimated mileage during the policy is a factor, too.
For example, perhaps your estimated annual mileage is 25,000. There is therefore more chance of mishap – and therefore more chance of making a claim – than if you cover 6,000 miles. This is reflected by the premium. Mr Blackham argued that your estimate as the beginning of your policy might be invalid if coronavirus restrictions have cut your mileage. You might drive far less.
‘Many people have seen their mileage drop steeply from the estimates they gave their insurer at the start of their policies’, he said. ‘If you are driving less, you are far less likely to make a claim so it is only fair you pay less. This is especially important now as many people are struggling financially’, he claimed.
Mr Blackham added that any cost can be multiplied for families with several cars. ‘The overpayment will be hitting them for each car they insure’, he argued.
Contact your insurer
The insurance expert therefore made a suggestion. ‘Contact your insurer to update them on your new mileage figure and ask to have your premium recalculated’, he explained. He added that ideally you should not pay to have the policy changed. Any associated fee ‘should be waved’, Mr Blackham argued.
‘If you are not using your car as much as usual due to lockdown, movement restrictions in your area, or your personal circumstances changing over the pandemic there could be an opportunity to save on insurance’, he summarised.
Mr Blackham further encouraged insurers to be fair to their customers and minimise the cost if practical. ‘With a circuit-breaker lockdown on the horizon – and residents in the North already in local lockdown – we are calling on car insurers to act responsibly to make sure drivers get value for money’, he added.
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