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Will Van Insurance Prices Increase In 2024?

12/02/2024


There is no denying that 2023 was a tough year for motorists with motor insurance premiums costing 25% more on average than in 2022 according to the Association of British Insurers (ABI). For van drivers, this meant the highest increase in premiums in 6 years amid the rising costs of claims and continued pressures on the insurance industry. With 2023 being a tight pinch on motorists’ wallets, many van drivers will be asking themselves if 2024 is set to be another year of increased premium prices.


Will Van insurance become more expensive in 2024?

Quoted van insurance premiums rose 35.9% in 2023. Professional services firm EY predicts a 10% rise (£58) in consumer premiums for 2024. This will be in addition to the increased price of consumer premiums experienced in 2023 at 25%, putting further strain on budgets. Unfortunately, van insurance will be no exception as the same pressures which made 2023 a tough year for insurers seem set to continue into 2024.

These pressures included a variety of factors which have come together to create the perfect storm, driving up premiums at a considerable rate. These factors acting to drive up your van insurance premiums include the following:

  • Increased volume of claims – In 2023 insurers reported an increase in the number of motor insurance claims, increasing the number of payouts made by insurers for 2023. According to an EY motor insurance analysis, insurers paid 10% more on claims in 2022 than they made on premiums. This made the increased volume of claims in 2023 particularly difficult to an already struggling motor insurance industry.
  • Higher claims costs – In the wake of the cost of living crisis, the costs of repair parts and labour have continued to increase. This in turn has made claims more expensive for insurers.
  • Pothole damage – According to Fleet News, over 631,852 pothole-related incidents were reported in 2023. This was the highest figure in 5 years. This naturally led to an increase in the number of claims paid out by insurance companies as potholes wreaked havoc on motorists’ vehicles, leading to increased damages and injuries.
  • Increased natural disasters – 2023 saw an increase in storm damage, flooding and other extreme weather events in the UK. This resulted in increased damages and so insurers were again faced with a further surge in claims. Whilst it cannot be predicted if this particular trend will continue in 2024, it may possibly continue to still be a factor influencing claim volumes in 2024 if frequent adverse weather events continue.
  • More complex components – With the rise of electric vehicles including electric vans, repair parts have since become more complex and also more expensive. This coupled with a shortage of semiconductors has seen the cost of replacement parts increase on average over the past few years. Until replacement parts for newer vehicles become more affordable and crucial components become more easily accessible, it is likely that we will see the price of replacement parts continue to rise in 2024.

Overall the increased number of claims made in recent years, and the increased costs associated with them, have forced insurers to raise their premiums in order to recover their losses. Insurers have faced their worst-performing year since 2010 as a result of the above-mentioned factors. Unfortunately, this means that policyholders will be the ones to foot the bill when they need coverage, including van drivers. Whilst this can seem unfair to consumers, it is understandable that insurers will raise their prices to keep up with the increased cost of claims.

Why is van insurance so expensive?

Vans are typically more expensive to insure than cars in the UK due to higher repair and replacement costs, increased risk of accidents due to their bulky handling characteristics, their potential to inflict greater damages due to their size, and lastly, vans pose tempting targets for thieves due to the contents usually kept in them, especially for commercial vans. As of December 2023, over 55 thousand of the UK’s 4.4 million vans were electric models. Whilst this equates to less than 2% of all vans on UK roads, electric vehicles are newer technologies and also more costly to service and repair. With the trend toward a hybrid and electric future for motor vehicles seeming set to continue, this will also likely push up the cost of van insurance in the near future until such time as repair and replacement become less specialised and more affordable.

How to save on your van insurance premiums in 2024

With industry experts and analysts warning motorists not to get their hopes up over the idea of cheaper premiums in 2024, there are still some things that can be done to help drive down your premium costs. Whilst you can’t control the insurance market, you can take some practical steps toward reducing your risk to insurers in order to increase your chances of being offered cheaper prices for your coverage. These tips are tried and true and really are your best way of meaningfully reducing your premiums.

  1. Always compare van insurance quotes – It may seem like a cliche, however comparing as many insurance providers as possible is often the easiest and most effective way of finding the cheapest UK van insurance currently on the market available to you. This is simply due to the fact that not all insurers will view the risk of insuring you equally. Because of this, you can significantly increase your chances of walking away with a cheaper quote by simply comparing different providers. Even if you have certain risk factors such as a modified van, previous claims history or even driving convictions, not all insurers will impose the same premium increase due to these factors. That’s why comparing providers is always recommended when looking for cheaper van insurance quotes.
  2. Don’t let your insurance auto-renew – Whilst the days of new customers being offered premium deals not given existing customers are officially over, it is still not advised that you auto-renew your van insurance policy. This isn’t because you will be charged more for auto-renewing but rather because your current insurer may no longer be the cheapest option available to you. In the weeks leading up to your renewal date, it is advised that you compare quotes from multiple providers and at multiple levels of coverage. That way you will be getting the best possible idea of what coverage options are available to you on the current market.
  3. Get the correct insurance for your needs – Taking out the wrong insurance can be an expensive mistake. Many van drivers will be tempted to grab the cheapest policy they find but this can be a mistake. It is important to ensure that any policy you are looking at taking out will adequately cover you for all your needs rather than just looking at the price tag. Make sure your policy covers things such as tools, goods or equipment. Not including these can leave you with costly replacement costs if your policy does not provide adequate coverage. It is also often cheaper to include tool and equipment cover under one van insurance policy than opting for stand-alone insurance. You should also transfer over any No-claims discounts which you could implement on your van insurance policy.
  4. Reduce your risk to insurers – As previously mentioned, insurers don’t all evaluate the risk of insuring someone individually. Some insurers may be less risk-averse to insuring a young van driver than others, whilst some insurers may offer more competitive prices for those with modified vehicles for example. Reducing your risk to insurers is always a good way of getting offered cheaper premiums since insurers will generally have an aversion to insuring individuals who will likely end up needing to make claims. Taking steps to reduce your risk can include some of the following.
    • Parking your van securely in a garage when not in use.
    • Investing in security features such as immobilisers, alarm systems, and dashcams.
    • Avoid penalty points and fines – Fines ranging from between £100 to £2,500 and three to six penalty points can be given for speeding in your van.
    • Avoid needing to make a claim – It’s simple but very effective.
  5. Pay annually rather than monthly – Paying for your van insurance coverage upfront for the year as opposed to 12 monthly payments can ultimately save you money. This is due to the fact that insurers will typically charge you interest for making monthly payments. So in the end you actually end up spending more on your van insurance than if you paid for the year upfront.

*The Mercedes Sprinter was the most stolen van model in the UK in 2023, with a ratio of 7.42 thefts for every 1000 vehicles.


Getting cheap van insurance

When it comes to getting cheaper van insurance, knowing where to look is key. The average van insurance premium in the UK currently stands at £1,129. The typical van insurance policy for a driver under 25 is £3,153. Whilst this is a tough pill to swallow for many motorists, especially considering that average premiums have risen 52% in the last decade without consideration for potential increases in 2024, it is important to remember that the average premium price for van insurance is impacted by drivers with high premium costs. What this essentially means is that the average is impacted by those drivers on the extremes of the pricing scale. So if you are a responsible driver with no previous claims and a lower risk profile, it is entirely possible to get cheaper than average van insurance. Even if you don’t pose the lowest risk to insurers it is also still possible to get a deal on your van insurance policy and walk away with cover below the average price.

The easiest way of doing this is to simply compare as many insurers as possible on the UK market, making it easy for you to compare van insurance quotes and get the best deals available to you. Quotezone.co.uk helps millions of users every year compare products and find savings on hundreds of consumer and business products such as car, van, fleet and motor trade insurance. You could save up to £590 on your van insurance by comparing van insurance with Quotezone.co.uk

Get cheaper van insurance here


This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes


References

*https://www.fleetnews.co.uk/news/vehicle-insurance-premiums-predicted-to-increase-by-10-in-2024

**https://www.ey.com/en_uk/news/2023/06/ey-uk-motor-insurance-results-analysis

***https://www.abi.org.uk/news/news-articles/2023/11/increased-cost-of-materials-and-labour-continue-to-push-up-price-of-motor-insurance-in-the-last-quarter/

****https://www.ey.com/en_uk/news/2023/12/ey-s-latest-uk-motor-insurance-results

*****https://www.abi.org.uk/news/news-articles/2024/1/motor-insurance-premiums-continue-to-rise-as-insurers-battle-costs/

******https://www.insurancetimes.co.uk/news/van-insurance-prices-see-highest-annual-increase-in-six-years/1451090.article

*******https://www.fleetnews.co.uk/news/pothole-damage-to-vehicles-at-record-high

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