Van insurance has increased 15.5% in the past year for new business customers taking the average quoted cost in the UK to £1,129, the latest Consumer Intelligence Van Insurance Price Index shows.
Prices have dropped 3.3% in the past months and are now below their record high hit in September last year, the index shows.
But the overall direction of travel remains firmly upward with the spiralling cost of claims and the lingering effects of new pricing regulations by the Financial Conduct Authority adding to renewal costs.
“Much like the Motor insurance market, van insurance is not exempt from the inflation seen in the UK economy. With the cost of living crisis and claims costs increasing, insurers are raising premiums to cover costs, with overall market premiums up +30.8% YoY,” says Harriet Devonald, product manager at Consumer Intelligence.
“The cost of claims is increasing partly because of the impact of inflation on parts, labour and replacement vehicles but also because more traffic is on the road after the pandemic lull,” she added.
The FCA ban on “price walking” introduced a year ago which prevents insurers quoting higher renewal prices to existing customers than new customers has led to higher renewal prices for all van drivers.
Older van drivers aged 50-plus pay £691 compared with a prohibitively high £3,153 for those aged under-25, Consumer Intelligence’s data shows.
Long-term view
Average premiums have now increased 52.4% since April 2014 when Consumer Intelligence first started collecting data.
Prices have soared in recent months – peaking in September 2022 – and now sit just 5% below the all-time high.
Type of cover
Drivers using their vans for business (£1,151) are now paying slightly higher annual premiums than those who use their vehicles as a car substitute (£1,064) under ‘social, domestic and pleasure’ (SDP) policies.
Insurance premiums for business users tend to be more expensive as they usually spend more time on the road and their vehicles are more technologically advanced. Claims pay-outs are usually higher as insurance may also have to cover for lost business because of owners not being able to work.
Van insurance premiums for business users have risen 15.9% in the last 12 months, with SDP drivers increasing a broadly similar 14.3%.
Age gaps
Older van drivers are facing the biggest increases in their van insurance premiums with the over-50s seeing prices surge 20.4% in the last 12 months. However an annual policy costs just £691.
Price rises for younger drivers are lower – they increased 15.4% for van drivers aged 25-49, and by 11.4% for drivers aged under 25.
However a typical annual policy for a van driver under the age of 25 remains prohibitively high at £3,153 while for those aged 25-49 premiums are now, on average, £863.
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