Claim costs drive van insurance price rises

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Rising claim costs are increasing van insurance premiums with average prices rising 14.1% in the past year to an average £1,344, according to new analysis from Consumer Intelligence.

The insurance market research company’s quarterly Van Insurance Index also found that the biggest price rises are being faced by drivers who use their vehicles as substitutes for cars. Average premiums paid under “social, domestic and pleasure” cover increased by 18% in 2016, compared with 13% for drivers using vans for work.

The data also shows that older drivers have seen premiums rise by 11.2% with over-50s paying £369, while under-25s have seen increases of 13.7% and can pay up to £4,707. Average premiums for van drivers aged 25 and 49 are rising the fastest – they increased 14.4% in the year to January.

Average premiums for vans are rising faster than for cars as the cost of claim payouts is higher as insurance may have to cover lost business as a result of owners not being able to work.

The price difference between “social, domestic and pleasure” and “carriage of own goods” is driven by insurers rating customers using vans for work as a better risk as they are more likely to be careful with their vehicle as it’s vital for work.

Ian Hughes, chief executive of Consumer Intelligence said: “Van drivers pay higher insurance bills than car drivers and with more people using their vans for work that adds to the costs of doing business.

“Choosing the appropriate cover is vital when keeping costs down and opting for carriage of own goods will reduce premiums.

“Carriage of own goods cover can also include social, domestic and personal use. Drivers opting for social domestic and pleasure use generally have past-times or hobbies that suit having a van as either their sole vehicle or as a second vehicle.”

 

 

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Marek Handzel

Marek Handzel is the editor of Claims Magazine. Marek welcomes articles, letters, or feedback from readers and can be reached by emailing marek.handzel@barkerbrooks.co.uk