Van insurance premiums have hit a record high of £1,881 and there could be pricing turbulence in the coming months.
New data from market analysts Consumer Intelligence shows premiums have risen 2% in the past year as of the end of March, with older drivers suffering the biggest rises – the over-50s have seen increases of 6.6% – while the under-25s are still paying the highest prices at an average £4,415, despite prices for young drivers having fallen by 9.9% in the past 12 months.
Consumer Intelligence also warns of pricing turbulence in the months ahead as the number of van drivers falls during lockdown and those who remain drive less. Insurers are predicted to make savings on claims as the number of vehicles on the roads has fallen by 59% compared to February but this will be tempered by delays to planned whiplash claims reforms.
And according to a flash poll by Consumer Intelligence, 55% of sole traders have had to either cease trading or plan to in the months ahead.
Pricing expert John Blevins said: “Many ‘man-and-van’ businesses are ceasing to trade because of the pandemic with policy cancellations likely in the coming months.
“Reduced new business volumes or cancellations are likely to dent insurers’ profitability, so prices could yet go either way,” he added.
Once lockdown lifts, it may well be the UK’s van drivers who are the first to hit the road again to earn their living.
“Those who’ve cancelled their policies may see an increase to their premiums or, indeed, given the lack of claims made, potentially even a reduction – but it’s a risk they take,” added Blevins.
“Anyone who does cancel their insurance policy needs to register their vehicle as off the road with DVLA and will not be covered for theft.
“As always, it’s best for drivers to have a conversation with their insurer about any savings they can make from driving less and to shop around for the best price at renewal.”