Car insurance firms could cancel policies and refuse to pay out in the event of an accident if the total mileage has been exceeded. Experts warn those looking to make a domestic holiday should consider whether the trip would push their mileage above their insurance plan.
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Specialists warn that annual mileage was one of the factors used to calculate a policy and exceeding your own limit could have devastating consequences.
However, with many motorists not driving over the lockdown it is predicted that even a long driving holiday would not push mileage over limits this year.
Speaking to Express.co.uk, a spokesperson for CarParts4Less warned making an accurate judgement over mileage was important.
They warned road users should contact the insurer in advance to see whether they are covered for a trip to avoid exceeding the limit and breaking their policy.
The spokesperson said: “If you’re planning on driving for a domestic holiday this year, it’s a good idea to consider whether the trip will fit into your insurance plan.
“Many policies use your annual mileage as one of the factors to calculate your insurance premium; the higher the mileage, the higher the cost.
“Accuracy is important when providing this figure, so even though many drivers won’t have driven much over lockdown.
“If a long trip will take you over your estimate it’s best to contact your insurer in advance to check that you’re covered for it.”
Mileage is one of the most important factors used by firms to determine premiums as it tells firms how often you are likely to be using a vehicle.
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Experts at Compare the Market says motorists should not try and guess their mileage when setting a limit.
They warn it was important to be as accurate as possible to avoid being caught out by breaking the rules or paying more than is necessary for cover.
They warn that drivers caught unknowingly misleading a car insurance firm in an attempt to secure cheaper premiums could face serious consequences.
This may mean some firms find it difficult to get cover in the future or may see premiums dramatically increased as a result.
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The RAC urges drivers to work out their average weekly mileage and multiply by 52 before allowing room for longer journeys such as holidays and day trips.
However, the lockdown may have saved motorists for 2020 as many have used their cars less and will not be looking to breach pre-agreed limits.
Martin Lewis has urged drivers to look at reviewing their estimated mileage over securing a payment holiday which would add interest onto an agreement over the agreed freeze.
Speaking on the Martin Lewis Money Show in May, he said: “The main one is when you ask them [insurance company] for a payment holiday the first thing they will do is review your cover to see if they can cut the cost.
“Say you don’t drive as many miles because you’re at home now, so that’s a good thing to do so.”
The Financial Conduct Authority (FCA) has also urged companies to reassess motorists’ agreements and change the terms of their agreement where necessary.
This could include reducing pre-set mileage limits to bring down overall yearly premiums for those which are using their car less.
Car insurance firm By Miles have urged motorists to consider switching to a pay-by-mile scheme which would see them only pay for the journeys they actually make.
This cuts out the need for making estimations on cover and then chasing firms for reductions if a pre-set limit is not reached.
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