As the country gradually recovers from the impact of the covid-19 pandemic, we asked Clare, our Van Trading Director at Commercial Vehicle Direct
to outline the current
state of the commercial van insurance market.
Are van insurance premiums changing?
The commercial van insurance market did see a rise in the cost of average premiums across the board last year, according to data from Go Compare1. This was due to more home delivery trades making an entrance into the market during the pandemic,
seeing an increase in temporary van insurance and demand for van courier insurance. Although, since March 2021, data from Go Compare1showed average premiums have started to come down.
What factors are driving van insurance changes?
There has been a noticeable reduction in the number of van vehicles being registered than before the pandemic, as reported by SMMT Vehicle data2. With fewer customers purchasing vans, there was less demand for commercial van insurance
quotes and van insurance renewals. There was also was fewer collisions due to less traffic being on the roads last year during the first lockdown, resulting in a fall in road accident claims down by 19% compared to the previous year, according
to research by Clarke Willmott3. Therefore, insurers made savings on not having to pay out for as many van accident claims, which slightly reduced premiums overall.
Will courier van drivers pay higher premiums and why?
Courier drivers will pay higher average premiums than a general tradesman
pays for their vehicle cover, purely due to spending more time on
the roads. Premiums are not necessarily rising for the same customer year on year, however, lots of newer entrants coming into the market with less experience have seen an overall increase for premiums by courier drivers, according to data recorded
by Brightside Insurance Group4
. Furthermore, as these drivers build their No Claims Discount (NCD)
, premiums will come down further.
How can you reduce your van insurance?
There are many factors that can influence van insurance premiums and steps that drivers can take to ensure costs to insure a van don’t increase further. Drivers should remain vigilant on the roads and keep their convictions, claims and
accident history to a minimum. Building up their “No Claims Discounts” will also be a massive beneficial factor. When making a claim, it is important to complete all details as correctly and accurately as possible. If your details
are outdated or incorrect, this can lead to insurers declining your quote online.
To ensure you are getting the best advice, it is important to speak to a specialist van insurer. At (CVD) we have a panel of insurer schemes that are designed specifically for van owners, and a team of expert brokers, who will help you find the
best specialist van insurance cover for your vehicle.
Should van owners accept a higher vehicle deductible?
Some van owners can reduce their premiums by selecting a higher deductible. This means customers would save money on their monthly insurance but in the unfortunate event of an accident could find themselves paying more for repairs. By opting for
a lower deductible, premium costs will be higher, but customers would pay less for out of pocket damages. That’s why it is important for customers to be mindful of how much they can afford when arranging their insurance policy. At Commercial
Vehicle Direct we can provide an optional product to cover the cost of increased deductibles/excesses. One of our advisors
will be able to give you more information on how we could help you save money.
Can security features reduce van insurance premiums?
There are specific schemes set up that require camera fitment or telematics black boxes to aid in the settlement of claims etc. However, this isn’t as prevalent in the Light Commercial Vehicle (LCV) market as it is with insurance cover
for fleet and taxi markets.
At Commercial Vehicle Direct , if you are finding your business van insurance
to be too high (due to these increased risks or the area that you live in), contact us and we
can liaise with the most appropriate insurer on your behalf to find you the cheapest van insurance quote and assess whether implementing additional security measures could reduce the cost to insure your van.
What security features help reduce commercial van insurance premiums?
For more expensive vehicles, installing a tracker can help reduce premiums and assist with vehicle recovery in the event of a theft. These devices are a necessity for businesses and are easy and affordable to install. Some insurance companies
can sometimes offer discounts to businesses for implementing tracking devices on their vehicles. This can save insurance companies from paying out for large claims in the case of when a stolen vehicle hasn’t been recovered.
Driver training to reduce premiums?
Wherever possible, van drivers should invest in taking some additional
5Light Commercial Vehicle driving training as this can reduce the chances of you being involved in an accident
and having to make a claim. While extra driving training won’t actually reduce your insurance premiums, this would be particularly beneficial to businesses operating within the fleet market, by ensuring their drivers are fully trained and
less likely to cause an accident in the future.
What is your view of using driver tracking and monitoring systems?
Tracking devices can help to check speed, detect harsh braking and acceleration. There are specific schemes set up that require camera fitment or telematics black boxes to aid in the settlement of claims, etc. However, this isn’t as prevalent in
the (LCV) market as it is with fleet and taxi markets. I think we will see more telematics schemes appearing in the (LCV) market over the coming months.
Can using tracking systems reduce premiums?
These devices can certainly help with some savings on the annual cost of the insurance. Consumers must make sure that they are aware of any penalties that can be incurred when purchasing a black box insurance. For instance, increased premiums with excessive
speeding or even cancellation.
To what extent is “crash for cash” a risk for van owners?
There seems to have been a decline in these types of fraudulent incidents over the last few years after the insurance industry has taken action against these bogus claims. The 6Insurance Fraud Bureau (IFB) has
carried out detailed analysis to reveal the hotspot areas linked to these scams. In addition, the government are making changes to the current claims process by introducing a new
7“whiplash reform”, which came into effect on May 31st 2021.
The new change aims to reduce the amount of compensation paid out by insurance companies, who will require evidence from claimants such as medical reports, to substantiate the extent of their injury, before a claim is settled. The costs paid by the insurance
company will then be proportional to the severity of the injury caused from the accident. This should also reduce the number of fraudulent claims further and in the coming months result in lowering of insurance premiums for drivers.
How to avoid “crash for cash” scams?
There are steps drivers can take to
8avoid a crash for cash scam. This includes to remain vigilant at all times when driving on the roads, keep a safe distance from the vehicle in front, look ahead to spot potential hazards or any unusual behaviour from other drivers. Be cautious when pulling up at the side of the
road, especially if another driver has encouraged you to do so. Also look out for whether the driver is using their brake lights, as some fraudsters will disable their brakes to cause an accident. Other things drivers can do to stay safe is to install
a dashcam, which can help with the settlement and prove which driver is liable for the collision. Do not confront the driver, except to exchange contact details as legally required.
Can rear cameras reduce collisions?
Yes, any safety measures that consumers can take to reduce the likelihood of them having a collision, especially covering blind spots, will help them avoid needing to make a claim, which in turn will help to keep their costs down over time. Rear camera
systems are usually installed in newer vehicles, but can be easily fitted into existing models. However, this device should only be used as an aid to give drivers a clearer vision when driving or parking, but is not a replacement for the driver
carrying out their own manual safety checks such as looking over their shoulder and checking their surroundings.
A small but growing number of businesses are acquiring electric vans. Has this raised any issues where insurance is concerned?
There has definitely been a steady growth for electric vehicles
, especially in the London area, where the congestion fees
are ever increasing. Whilst these vehicles are beneficial in combating climate change, they do pose a number of risks and challenges for insurers, such as performance issues and costly repairs.
However, at present, these types of vehicles are not yet commonplace and insurance coverage for such vehicles is not yet as widely available. When these vehicles start to become more popular, perhaps we can start to see these market challenges decrease.
If you are looking to insure an electric vehicle, we can help. At CVD we have access to wide range of insurance providers, with a wealth of specialist knowledge in this market. Call us today for a quote and we can ensure your vehicle is covered correctly.
Are electric vehicles more expensive to repair than diesel vans after a theft or accident?
Claim costs for electric vehicles can currently be higher as replacement parts for these types of vehicles are not yet as common as for diesel vans. In particular, the replacement cost of batteries are extremely high and this is what tends to drive up
overall claim costs and contribute to higher premiums. However, this is likely reduce over time, as the demand for these electric vehicles increases.
Many LCV’s are fitted with ancillary equipment. Does this pose any challenges for insurers?
There are plenty of schemes available that cater for a range of ancillary equipment on LCV’s for variables such as tail-lifts and fridge units, not all insurers will cover these types of vehicles or modifications. However, this doesn’t necessarily
mean the van insurance cover will be more expensive for the customer.
Get a UK Van Insurance Quote
We always recommend speaking to a specialist provider to ensure the customers are fully covered with a policy that caters for the requirements of their vehicle so they can drive away with peace of mind.
At CVD Insurance Services we do just that! Give us a call today and get a commercial van insurance quote.
1 - Go Compare Aggregator Data
4 - Insurance Premiums Data taken from Brightside Insurance Group
9 - Allianz - Growth for Electric Cars: New risks and claims scenarios - http://www.agcs.allianz.com/news-and-insights/news/electric-vehicles.html