Van insurance premiums surge to record highs as inflationary pressures bite
Van insurance premiums have surged to record highs, after increasing for six consecutive months in a row, due to soaring inflation and widespread price hikes in response to new rules banning the practice of “price walking”.
The cost of insuring a van increased by 13.6 per cent during the first six months of the year, to record highs of £1,156, research from Consumer Intelligence shows.
The surge in premiums comes as inflationary pressures and supply chain issues have begun to increase the cost of fulfilling claims due to the higher costs of parts and labour.
New rules, introduced by the UK’s Financial Conduct Authority (FCA) in January which ban insurers from imposing higher premiums on loyal customers, also led to insurers hiking prices.
The new rules saw insurers up their prices across the board after they were banned using low premiums to win new business whilst hiking prices for their longstanding customers.
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,” Devonald said.
The recent surge comes as van premiums have increased by 49.8 per cent since records began in April 2014.
Those between the ages of 25 and 49 have been hardest hit by the long term price hikes in having seen their average premiums increase 71.5 per cent since 2014, to averages of £851.
Meanwhile, those under the age of 25 have seen their insurance premiums drop by 20.4 per cent, to averages of £3,550.