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Almost half of all drivers could be over-paying for insurance by as much as £180 as research showed those that use cars less pay more than road users who rack up the mileage.
Despite infrequent drivers being less likely to claim, research by insurer By Miles showed that some providers inflate premiums for lower-mileage drivers to subsidise the cost of higher claims from those who spend more time behind the wheel.
Drivers that travel fewer than 7,000 miles per year – the average distance travelled per year according to the Department for Transport – pay a “low-mileage” penalty of £180 compared with motorists that clock up more miles. As many as 19.3 million people, or 50pc of motorist, could be overpaying.
By Miles compared 1.7 million insurance quotes on online comparison website Money Supermarket.
The worst hit are those in their mid-to-late twenties that drive 5,000-6,000 miles per year. They pay £239 more than those of the same age driving double that amount. However, regardless of age all infrequent drivers pay a low-mileage penalty.
Yet drivers who clock up 11,000-12,000 miles per year are one and a half times more likely to make a claim. By Miles called on the insurance trade body the Association of British Insurers (ABI) to put an end to the penalty, claiming it was unfair and illogical.
James Blackham of By Miles said: “Drivers are completing fewer miles during the lockdown, so the unfairness of the traditional car insurance pricing structure is clear to see. If you drive less, you should pay less.”
A spokesperson for the ABI 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.”
However, a number of large insurers, including LV, Admiral and Direct Line, denied they charge a low-mileage penalty but said it would be possible for a premium to be higher for a lower annual mileage if the driver scores poorly on other metrics.
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