A report by the Association of British Insurers (ABI) has shown that Payouts for motor insurance claims declined by 6 percent year-on-year to reach £8.3 billion while personal injury claim heightened in 2020.
Also, the number of motor insurance claims settled at 2.1 million also fell by 19 percent compared to the previous year’s as the last quarter of 2020 saw number of claims down to 468,000 representing a dip by 13 percent as a result of the Covid-19 lockdown which led to reduced road usage thereby causing traffic to fall by 14 percent in the year to June 2020. The report further shows.
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Laura Hughes, manager for general insurance at the ABI, 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.”
However, ABI found that the average payout for a personal injury claim rose 13 percent (at £12,000) during 2020, as it includes a personal injury payout that impacted the average value of paid motor claims causing it to increase from £3,400 in 2019 to £4,000 in 2020.
“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,” Hughes noted
In addition, the average price paid for private comprehensive motor insurance remained at a four-year low £465 in 2020. ABI said.