Demand for pay-by-mile car insurance surges by 75% as millions continue to work from home

• Drivers can now access pay-as-you-go cover starting from a £170 fixed annual fee plus from 3 pence per mile driven, compared to an average annual premium of £460²
• Official figures suggest that almost two in five of the pre-crisis workforce are exclusively working from home (38%), with another 8% doing so for some of the time³
• More than 11 million⁴ UK workers may be able to work from home longer term, or for some of their working week, with no need to commute
• Pay-by-mile car insurance provider, By Miles reveals that policy sales in July 2020 jumped by 75% compared to the start of the year

With the Covid-19 pandemic and national lockdown changing how millions of people across the UK work and commute, drivers should consider all insurance options available to them when searching for a new car insurance policy. This includes on-demand insurance, as a new comparison reveals it could save them over £150 a year.

According to official statistics, almost two in five of UK employees (38%) worked exclusively from home during lockdown, and another one in ten (8%) did so for some of the working week. As many more companies are embracing a flexible working culture post-lockdown, it means that over 11 million of UK workers may be able to work from home long term, either exclusively or for some of the time, drastically changing their commuting habits and costs.

Official figures show that an average car insurance premium in the second quarter of 2020 cost £460 but many start-up insurance providers have been disrupting this market as quick adapters to new consumer needs in the ‘new normal’. By Miles, a leading insurtech in usage-based insurance and the first company in the UK to offer real-time pay-as-you-drive car insurance backed by insurance giant Zurich, reported a 75% increase in sales in July compared to the start of the year.

By Miles, for example, offers drivers insurance for a fixed fee starting from £170 to protect their cars against theft, accidental damage and vandalism while parked, with pay-as-you-drive costs from as little as 3 pence per mile, which could save those driving fewer miles post-lockdown hundreds of pounds a year.

James Blackham, co-founder and CEO of By Miles, said, “We’ve seen demand for our pay-by-mile policies continue to increase as UK drivers look for more flexible insurance cover that better fits their needs post-lockdown.

“This crisis has shown UK drivers that traditional car insurance models don’t work for everyone. It doesn’t make sense to pay the same price month-on-month if your driving habits keep changing, so insurance needs to evolve to work in this new world. It’s time to move towards car insurance that offers more flexibility and actually encourages people to drive less.

“Our advice to anyone that wants to drive less is – if it’s under a mile, walk or car share where possible, and if you’re able to cut your mileage down to under 150 miles a week, or about 7,000 miles a year, it’s worth considering a pay-by-mile insurance policy. You could save over £150 while saving the planet at the same time. Now more than ever, it’s clear that people must be rewarded for driving less.”

Phil Ost, car insurance expert at Zurich, commented, “We are seeing a real shift in drivers’ needs and behaviours across the UK and the insurance sector needs to adapt to their new habits. With a significant proportion of the UK workforce now working from home, motorists should certainly consider on-demand cover when shopping around for car insurance at renewal, as they may find that it saves them a significant amount over the year. And in incentivising those who drive fewer miles, we do our bit for the planet and sustainability.”

Blackham added, “Zurich are a highly experienced insurer with an outstanding record for claims expertise, boasting a 99% payout rate on claims in 2019. Partnering with Zurich will give our members the peace of mind that they’ll be protected by the best if the worst happens. Having had our strongest ever sales month in July, this partnership will support our continued growth.”

Notes to editors

¹ 10% of customers who provided a best alternative price in their quote saved over £150 in October 2019, but members on the By Miles Trustpilot page report savings much higher in reviews

² The Association of British Insurers’ (ABI) latest Motor Insurance Premium Tracker found the average price paid for comprehensive motor insurance in the second quarter of the year was £460
£170 plus pay-as-you drive cover from 3 pence per mile offered by By Miles

³ YouGov, May 2020

⁴ ONS Data: 38% of 29.08 million UK workers = 11,050,400