Why Is Van Insurance So High? Partly, It’s That Loyalty Discount Thing

Van insurance has increased 13.6% in the first half of 2022 for new business customers – with the more recent price jumps attributed to spiralling inflation, as well as the earlier increases being pinned on the introduction in January of new rules to tackle the practice of “price walking.” That loyalty discount offered to existing customers means that new drivers have to pay more, since they are an unknown risk – to an extent.

Although many people want to do part time delivery work in a small van, or car, often at weekends, the cost of getting Business Insurance cover is high. According to the latest data from insurance insights company Consumer Intelligence. In the UK, the average quoted cost of van insurance is now £1,156.

“Claims inflation is certainly feeding through to customers’ premiums – the increased cost of parts and labour, as well as supply chain issues,” says Harriet Devonald, product manager at Consumer Intelligence.

“Most insurers also increased their new business prices significantly in January as a result of the new rules to ban price walking, which were brought in by the Financial Conduct Authority. The FCA rules mean insurers are no longer able to offer new customers enticingly low premiums to win their business – with renewing customers only allowed access to the same deals as a new customer. Average premiums have now increased 49.8% since April 2014 when Consumer Intelligence first started collecting data. Prices are now at their highest point since our records began.”

Type of cover

Drivers using their vans as a car substitute (£1,175) are now paying slightly higher premiums than those who use their vans for business (£1,150).

Premiums have risen 12.5% in the last 12 months for vans driven for personal and domestic reasons – under ‘social, domestic and pleasure’ (SDP) policies – whereas prices have increased just 12.1% for business users over the same period.

Age gaps

All age groups have recorded double-digit increases to their motor insurance policies since the start of the year.

Even younger van drivers under the age of 25 – who have seen 20.4% wiped off the cost of van insurance in the eight years since Consumer Intelligence first started collecting the data in April 2014 – have now seen annual policies rise, on average, 10.6% so far in 2022. And for van drivers aged 25-49 and the over-50s, prices have risen even more steeply in 2022, at 14.0% and 13.9%, respectively.

A typical annual policy for a van driver under the age of 25 remains prohibitively high at £3,550. For those aged 25-49 premiums are now, on average, £851. While for the over-50s, an annual policy costs just £618.

About alastair walker 9352 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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