The cost of van insurance is skyrocketing, with premiums increasing for the sixth consecutive month, new research has found.
Van insurance for new business customers rose 13.6% in the first half of 2022, according to researchers at Consumer Intelligence.
Inflation is partly to blame for rising premiums, with insurance providers having to pay out more for repairs due to rising costs of parts and labour.
New laws also launched in January to stop providers charging new customers less than those renewing - a process called ‘price walking’ that favoured those who shopped around over loyal customers. However, rather than saving loyal customers money, it has generally meant the price of new policies across the motor insurance industry have soared while renewals have stayed more stable.
Analysts found the average price of a van insurance quote was £1,156. Those using their van for business use pay slightly less (£1,150) than those using it as a substitute for a car for social, domestic and pleasure (SDP), who were quoted an average £1,175.
Harriet Devonald, product manager at Consumer Intelligence, said: “Claims inflation is certainly feeding through to customers’ premiums – the increased cost of parts and labour, as well as supply chain issues.
“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.” An average policy has now risen 49.8% since April 2014.
NimbleFins’ own research, released in August, found the average cost of comprehensive van insurance for a 2018 Ford Transit is just over £1,300 a year for plans with a £500 excess.
We looked at quotes for a Ford Transit van of different ages and found prices could be almost £200 cheaper for older vans, with a quote for a 2014 model coming in at £1,156 and a 2020 model costing £1,333. However, excesses could also be increased for older models as they are more likely to need work.
Younger drivers are considerably more expensive to insure than those in their thirties and forties.
Erin Yurday, CEO and co-founder of NimbleFins, said: "Comprehensive plans are the best type of van insurance. Not only do they protect against damage to the policy holder's vehicle as well as other vehicles, they are usually cheaper.
"Those taking out third party or third party, fire and theft, are considered riskier drivers and more likely to need to make a claim.
"Our research into the average cost of van insurance actually found comprehensive cover to be more than £1,000 cheaper than third party only."
NimbleFins previously reported the cost of car insurance was also rising. New policy prices increased 3% in the second quarter of 2022, to £500. While renewals rose 0.5% to £371.