Van insurance costs hit three-year high - Van Insurance - News | moneyfacts.co.uk

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Van insurance costs hit three-year high

Van insurance costs hit three-year high

Category: Van Insurance
Author: Leanne Macardle
Date: 31/10/2017

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The cost of insurance continues to rise across the board – thanks in no small part to repeated insurance premium tax (IPT) hikes, rule changes and higher claims costs – but it looks as though van drivers have been particularly hard hit, with figures from Consumer Intelligence showing that average van insurance costs have rocketed to a three-year high.

Prices up by a third

The research found that van drivers are facing annual insurance price rises of nearly a third, with average premiums surging by 31.7% in the year to September to stand at £1,214, the highest seen since April 2014.

Analysis suggests that much of this has been driven by Government and regulatory intervention, with the latest IPT hike coming into force in June this year, not to mention the cut in the Ogden rate, which changes the way the most serious personal injury claims are calculated.

That's before we even get to the rising cost of claims, driven by higher repair costs and more technologically-advanced vans, together with rising fraud costs and the weak pound, which has only added to the cost of repairs. Combined, this has proved to add huge amounts of pressure to the van insurance market, and consumers are paying the price – and unusually, older drivers appear to be the hardest hit.

Hardest hit

The over-50s have suffered an average price rise of 37.4% in the last year, putting the average premium at £565. However, despite suffering the largest increase, this pales in comparison to the cost for the average under-25 driver, who has seen average premiums rise by 30.8% in the last 12 months to an average of £3,546, despite falling by 2.6% in the last quarter.

Comparing types of cover also reveals notable variations. Those using their vans as car substitutes have seen an average price hike of 30.9% in the last year, with the typical premiums for social, domestic and pleasure cover standing at £1,327. Conversely, those with carriage of own goods cover pay a slightly lesser average of £1,186, but this equates to a rise of 31.6% over the year.

Mitigating the impact

There are plans afoot to reverse the Ogden rate change which is helping to slow price rises somewhat, with some insurers even reducing their premiums, said the report. However, average prices are still rising by around 2% every month, so drivers would be wise to thoroughly compare van insurance policies to make sure they get the best deal possible.

John Blevins, Consumer Intelligence pricing expert, commented on the latest findings:

"We are still not seeing a return to the steadier 1% month-on-month price rises before the Ogden rate adjustment in March. With the value of the pound remaining low, the cost to repair vehicles is rising, particularly where parts have to be brought in from overseas.

"The cost of claims is also increasing as vans now have more advanced technology onboard … there are some indications of rising claim costs for customers using vans for their business, and to some extent a rise in the number of fraudulent cases, too."

All in all, it isn't looking good for van drivers as far as insurance costs go, so don't run the risk of paying too much – if it's time to renew your policy, make sure to compare premiums using our van insurance quote tool, and see if you can beat the price hikes to keep your premiums in check.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Close