Van drivers are facing annual insurance price rises of 29.5% as new compensation rules and tax increases have sent premiums soaring.
According to insurance market research experts Consumer Intelligence, average bills are now £1,636 with prices soaring in the past three months as the decision by regulators to slash the discount or Ogden rate governing payouts in major personal injury claims to minus 0.75% from 2.5% came into effect. The increase in Insurance Premium Tax at the start of June and rising claims costs are piling on the pain for self-employed workers relying on vans for work.
The company’s analysis found that drivers using their vans as car substitutes have suffered the biggest rises – average premiums for “social, domestic and pleasure” cover increased 33.5% in the year to June. Drivers relying on their vans for work are regarded as a better risk – but premiums for “carriage of own goods policies” were still 28.4% higher over the year.
“The acceleration in insurance costs for van drivers is down to the Ogden changes in March with tax rises and claim costs adding to the pressure,” John Blevins, a Consumer Intelligence pricing expert, said. “Before the Odgen rules came into effect in March, prices were rising by around 1% a month and then rocketed by 11.4% in April with the Insurance Premium Tax rise in June adding another 2%.
“Choosing the correct cover is vital and opting for carriage of own goods where appropriate will reduce premiums, as will shopping around as prices vary month on month and between providers.”