Van drivers are facing a rise in premiums, despite an overall fall in the past year.
Consumer Intelligence’s latest Van Insurance Index reveals that average insurance prices have risen 1.2% in the three months to December, even though premiums were down 0.9% over the 12-month period. Average prices now stand at £1,299.
“The price rises in the past three months are signalling a turn in the market after a sustained period of premium reductions,” said Consumer Intelligence’s pricing expert, John Blevins.
Continuing Brexit uncertainty, which has dragged the pound lower, is also exacerbating the increases to drivers’ premiums. Because many of the most popular makes and models are manufactured overseas, repairing them means importing more expensive parts.
“Insurers have passed on price cuts where they can, but claims costs are dictating premium rises with the increased cost of importing spare parts a major factor when repairing vans following accidents,” John Blevins added. “That is likely to remain the case this year, with claims frequency and costs the big drivers for any further rises in premiums.”
Over the longer term, average van premiums have increased 36.5% since April 2014, when Consumer Intelligence first started collecting data. Yet, while prices may now be rising again, they still have a way to go before they surpass their September 2017 peak.
“It may not be too long before we see van insurance premiums reach record-high levels again,” John Blevins said. “Also, as technology within vehicles increases, so do the costs to repair them.”
Drivers using their vans for business purposes have seen an upturn in premiums in the last three months, whereas those used solely as a car substitute have seen prices plateau.
An average policy for drivers who chose ‘carriage of own goods’ cover now stands at £1,305 – an increase of 1.5% in the last three months. For van drivers in the social, domestic and pleasure category, the average policy is now £1,276 – a decrease of 0.1% in the last three months. However, when viewed over a 12-month period, both groups recorded falling premiums by -0.6% and -2.3 respectively.
The upturn in the market is filtering through to all age demographics. While the over-50s continue to attract the lowest average premiums, at £609, they witnessed the joint-biggest price increases (2.5%) of any group over the last three months. This also pushed them into positive territory for the year; the only age group to record gains over a 12-month period.
For drivers aged 17-24, who have seen premiums tumble the most over the last 12 months, prices also increased by 2.5% in the last quarter. Their average premium is now £3,679, but prices are still 5.9% down on 12 months ago.
Meanwhile, premiums for 25-49 year-olds increased marginally, by 0.4%, over the last three months to leave them down by just 0.3% over 12 months. These drivers typically incur a premium of £918.