London, United Kingdom (CU)_ As more drivers return to the roads, auto insurance premiums are expected to jump twice in the next six months. Ryan Fulthorpe from the price comparison site GoCompare shared his views about more vehicles returning to the road after lockdown. He said, “I see premiums rising over the next few months as we go out of this period of lockdown. There is the potential that consumers are going to increase their mileage because of that, and that is a very big risk factor. Obviously, the longer that you spend in the car the more likely that you are to get in an accident. And if you are not in the car, you are not going to cause a crash.”
According to comparison site Comparethemarket.com, car insurance premiums have dropped by an average of £74 this year compared to last year due to a decrease in car insurance claims. Dan Hutson of Comparethemarket said, “As more cars return to the road, the cost of insurance could start to increase”. The second price hike is most likely due to new rules for insured people in the new year. New rules imply that customers renewing their plans cannot be charged more than those purchasing new policies.
From January, the Financial Conduct Authority will prohibit insurers from charging existing customers a greater cost while renewing their policies than they would for taking up a new policy, which is a practice known as the loyalty penalty. According to industry experts, the cessation of this practice will certainly raise insurance prices across the board because insurers cannot charge as much when homeowners renew their policies.
