Don’t Drive Often? You’re Paying More For Car Insurance

New research has revealed that motorists who don’t drive often actually pay more for their car insurance. This is despite the fact that more frequent drivers are more likely to make a claim…

Pay More To Drive Less?

New research conducted by insurance provider By Miles has revealed that drivers with an annual mileage of less than 7,000 face a ‘low mileage premium’. This means they’re effectively subsidising the premiums of drivers who take to the roads more frequently. The average annual distance covered by British drivers is 7,090 miles. The most popular mileage bracket on car insurance is between 5,000 and 6,000 miles. However, drivers in that bracket pay up to £215 more than drivers covering double the amount of ground annually. Younger drivers suffer even more from this discrepancy. Those aged between 25 and 29, clocking between 5,000 and 6,000 miles annually, pay £239 more on their premiums.

What makes all of this so confusing is that motorists who drive often are the most likely to make a claim; meaning the more you drive, the greater the risk you are to a car insurance provider. For perspective, drivers who cover 12,000 miles a year are around 50% more likely to have made a claim over the last five years than those who drive under 7,000 miles annually. Even more striking is the fact that they’re 300% more likely to have declared a claim that those who drive just 1,000 miles a year.

An Unfair System 

James Blackham, co-founder of By Miles, has emphasised how unfair the car insurance business can be; especially during lockdown. He said, “at a time when drivers are completing fewer miles during the lockdown, the unfairness of the traditional car insurance pricing structure is clear to see. If you drive less, you should pay less. It’s a fact that lower mileage drivers are less likely to claim, so there is no logical reason for the higher charges they’re facing”. He drew attention to the fact that his own company offers care insurance by the mile.

The Association of British Insurers (ABI) said that the car insurance industry is competitive and that policies are constantly being reviewed. In a statement it said, “despite ongoing cost pressures for insurers, motor insurance remains a competitive market. Insurers always take into account, and constantly review, a wide range of relevant factors, including age, type of vehicle, driving record, and mileage, to ensure that premiums accurately reflect the risk”.

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