Insurance is one of the necessary but expensive aspects of owning a van when it comes to running costs. In the past 12 months, premiums have already risen by 8.3%, yet according to data analytics company Consumer Intelligence, there could be further hikes afoot.
After much speculation, the Ogden rate – which is used to work out the lump sum that claimants receive from insurers in the event of an accident – was changed from -0.75% to -0.25% in July 2019. This left the industry facing a higher bill than expected, and as a result, a car and van insurance increase is likely.
Figures from the latest Consumer Intelligence Van Insurance Price Index show that average van insurance costs currently stand at around £1,171, with those using their commercial vehicle for business-facing average premiums of £1,202.
Drivers between the ages of 17-24 have the highest average premiums, at £3,958. Those in the 25-49 category pay on average £823, with over 50s paying £508.
According to Consumer Intelligence, the change in the Ogden rate – and whether drivers will see premium price increases – will partly depend on which insurer they choose and how claims reserves were managed before the change. Some, they say, may even be able to reduce prices.
Insurance companies, however, have insisted that compensation payments would prove too high as a result of the rate change. The general insurance claims director at LV, Martin Milliner, told the Financial Times: “At this level we believe that claimants will remain overcompensated, thus undermining the common law principle of 100 percent compensation.”
Although telematics has been adopted well in the car market, the van market hasn’t followed suit. A telematics box is a great way for younger commercial vehicle drivers to reduce their annual insurance premiums, enabling them to prove that their driving is responsible.
It’s also worth going to various suppliers for quotes or checking a comparison website before committing to a premium. This will enable you to understand what is offered and what excesses are required should you need to make a claim. It’s then possible to compare quotes like-for-like and choose one that offers a better price.
If your commercial vehicle is older, it may also benefit you to upgrade to a newer model. Insurance premiums are often affected by the level of safety and security features on your van, and choosing one with a better specification in this regard can help you to reduce the cost of your premium.
Here at Vanwise Group, we can help you find the ideal van contract hire agreement on one of our used vans, which have all been carefully inspected by trained technicians and are roadworthy and ready for sale. We offer a wide selection of vans on finance, produced by an array of manufacturers and tailored to meet a variety of needs. Our experts will outline the specs of different models and provide you with the insurance band for each vehicle you shortlist. Contact our team in Harlow for details.