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10 million drivers could face higher car insurance premiums: how to get the best deal

Workers taking to the roads after lockdown may need to amend their policies

10 million drivers could face higher car insurance premiums: how to get the best deal

Millions of drivers could face a hike in their motor insurance premiums when they return to work after the lockdown.

A report by Compare the Market found that 61% of drivers expect to commute by car post-lockdown, compared with just 34% before the Coronavirus outbreak.

This could mean more than 10 million extra cars on the road – potentially resulting in higher insurance costs for drivers.

Here, Which? explains what’s happened to car insurance during the pandemic and offers advice on how to get the best deal.


Drivers facing higher premiums

If you’re going to start driving to work, you’ll need to ensure that your car insurance policy covers commuting in addition to social travel.

Many drivers will need to upgrade their policies to a ‘social, domestic, pleasure and commuting’ policy (or SDP+C), which is likely to bring a higher premium.

Compare the Market says a man in his mid-30s driving a Skoda Octavia in London could see his policy rise in cost by 6%, from around £330 to £350.

The price comparison site says the West Midlands, Wales and Yorkshire are the areas where people are most likely to switch to driving to work after lockdown.

In London, 32% of drivers say they will drive to work, compared with just 20% before the lockdown. Some 45% still plan to use public transport.

Percentage of people driving to work

Region Before lockdown After lockdown Increase
West Midlands 40% 78% +38%
Wales 41% 77% +36%
Yorkshire and the Humber 41% 72% +31%
South East 37% 69% +32%
East Midlands 41% 68% +27%
East of England 35% 65% +30%
North West 36% 62% +26%
North East 30% 62% +32%
Scotland 35% 57% +22%
South East 28% 56% +28%
London 20% 32% +22%
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COVID-19 and car insurance

With fewer drivers on the road, premiums dropped by 7% between March and May. The average car insurance premium fell to £702, compared with £755 in the previous quarter.

It remains to be seen whether this trend will continue as people return to work. Theoretically, more drivers mean greater risk – and higher insurance costs – but Compare the Market says it hopes providers heed advice from the Financial Conduct Authority (FCA)

In May, the FCA asked insurers to consider whether customers are getting value for money from their policies given the COVID-19 outbreak, and to waive cancellation fees and additional charges.

Concerns about the cost of insurance come at a time when many households have seen their finances stretched.

A separate report by Compare the Market released earlier this week found that 30% of families with children at home found it difficult to pay their bills over the past seven days – the highest level recorded since lockdown began.

How to find the right car insurance policy

Compare the Market says the difference between the cheapest premium and the average premium is currently £108, so there’s money to be saved by switching deal.

Here are our top tips on finding the right car insurance policy.

1. Don’t just choose the cheapest policy

Price is an important factor to consider, but don’t just go for the cheapest policy.

Doing so could end up costing you more in the long run if you haven’t bought the right level of cover, or if the policy comes with additional fees.

2. Read the terms and conditions

The small print on insurance policies is notoriously complicated, but don’t let this put you off finding out what you’ll actually be covered for.

If you don’t purchase the right type of policy, you risk being caught out should you need to make a claim.

3. Set the right excess

If you set your voluntary excess too high, it could make a claim not worth pursuing, especially when taking into account the compulsory excess set by the insurer.

It’s sometimes possible to reduce your excess to a much lower amount in exchange for paying a little more on your premium.

4. Be prepared to haggle

If you’re staying with the same insurer, you might be able to get a cheaper renewal premium for the same level of cover by haggling.

Check out our guide on haggling to ensure you get the best deal.

5. Consider a black box policy

Younger drivers generally face higher premiums, but you can prove how safe and careful you are, and perhaps qualify for cheaper prices by agreeing to have a tracker installed in your car.

‘Black box’ GPS trackers send data on the quality of your driving to your insurer.

You can learn about the pros and cons of using a tracker, and find out what happens to your data by reading our guide on how black box insurance works.

Best and worst car insurers

To help you find the best insurer, we’ve combined expert analysis of 30 car insurance providers’ standard policies with feedback from thousands of policyholders to produce our car insurance reviews.

You can also find useful tips in our comprehensive car insurance advice guides and the video below.

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