The impact of COVID-19 has been far reaching, ranging from disruption to manufacturing and supply chains on the one hand, to a reduction in demand for new vehicles – and the underutilisation of existing ones – on the other as society moves to consider alternative forms of transport such as cycling or walking. Whilst likely to be of only limited utility for the majority of commuters returning to work, plans have recently been announced to begin trialing e-scooters in June as a credible alternative to short(er) car journeys.
We reported here that the underutilisation of vehicles had led to one of the UK’s largest motor insurers refunding a fixed sum to customers in anticipation of a reduction in claims frequency, and the data published by the Claims Portal recently revealed that, for low value personal injury claims (i.e. £1,000 - £25,000), the number of claims notified in April has indeed plummeted to less than half of the monthly average (44%).
With the lockdown implemented on 23 March seemingly relaxing, and new government guidance updated on 11 May, we note that paragraph [3.3] deals with “working in or from a vehicle” (i.e. couriers, mobile workers, lorry drivers, on-site transit, work vehicles, field forces) but notably omits any reference to passenger transport, which continues to be discouraged:
“Social distancing in vehicles
Objective: To maintain social distancing wherever possible between individuals when in vehicles:
- avoid multiple occupancy vehicles where safe to do so
- vehicles should not be shared if possible
Steps that will usually be needed:
- Devising mitigation measures where workers have no alternative but to work within 2m… [including] sitting side-by-side, not face-to-face…
- Using a fixed pairing system if people have to work in close proximity, for example in a vehicle.
- Making sure vehicles are well-ventilated to increase the flow of air, for example, by opening a window.
- Ensure regular cleaning of vehicles, in particular between different users.”
Other key considerations arising include:
- Claims reporting
The Government’s social distancing measures will likely necessitate the deployment of enhanced technology solutions to complete liability investigations; examples include greater use of mobile phone hardware to capture evidence from accident scenes leading to increased scrutiny of phone records and telematics data where available.
- Change of profile for motor accidents
Journeys undertaken during lockdown are likely to be limited to essential travel around town. We anticipate a spike in lower value ‘bent metal’ claims, including those arising from parking or other low speed manoeuvres.
- Increased scrutiny of credit hire claims
As a consequence of schools being closed, limited non-essential travel could readily be resourced where claimants’ households already have access to a single vehicle. Whilst the question of need has, historically, been a relatively low threshold, this pandemic means that defendants should once more be scrutinising claimants’ needs to enter hire. Periods of hire are also likely to be a fertile ground for disputes between the parties where an alleged interruption to the supply chain for replacement parts is alleged to be the cause of protracted hire periods.
- Driver prosecution cases taking longer to prosecute
Restricted access to the courts – and the absence of trial by jury – will inevitably delay the outcome of these cases, which creates practical difficulty for insureds if vehicles are detained by police pending investigations; a number of forces are currently quoting a 12 month period for completion of Collision Investigation Reports.
- Mechanical defects
Whilst the Government’s decision to extend MOTs by 6 months where expiring post 30 March 2020 is likely to relieve individuals of criminal liability – but not those whose certificates expired between 23 March - 30 March – civil liability remains unaffected where accidents arise as a result of mechanical defects; road users remain under strict instructions to ensure vehicles are safe to drive.
With vehicles likely to be underutilised for the short to medium term, as society moves to alternative forms of transport, consumers will likely demand greater flexibility from their insurance offerings. COVID-19 has required employers to wholeheartedly embrace remote working such that flexible working – and a resultant reduction in the numbers commuting on a daily basis – is likely to persist, supporting a move towards more usage based insurance (UBI) covers.