Van insurance premiums have climbed to unprecedented levels in recent times and, for most owners, represent the single most expensive aspect of operating a light commercial vehicle.
According to Neil Grimshaw, director at independent broker Ravenhall Risk Solutions, the cost of claims is the main driver for premium inflation, while he adds that “there are many factors which drive this – increasing repair costs from a parts and labour perspective and also the more complex nature of systems on vehicles lead to what used to be low-cost, low-impact claims becoming more costly”.
He continues: “Compare front bumper damage on a vehicle 20 years ago to the complexity of a repair these days, with body colouring, internal systems for crash protection and aids like parking sensors.
“Also, personal injury claims have seen the cost of even relatively minor claims increase in a significant manner over the last 15 years.”
Grimshaw doesn’t feel that the added safety features in today’s vehicles is significantly reducing the number of claims. “Statistically, we have a similar number of accidents per head of traffic population, so whilst these systems increase safety, they don’t necessarily lead to fewer accidents,” he explains.
Meanwhile, Mark Gabriel, head of van insurance at Admiral, cites other reasons for rising premiums: “We’re seeing high levels of claims from customers for theft of belongings from vans and theft of the vehicles themselves, which has driven insurance prices up.
“In addition, the government decision to change the Ogden rate [which sets pay-outs for major personal injury claims] in March this year has also increased the cost of bodily injury and affected the price of premiums.”
Do your bit
There has been speculation in the media that some van manufacturers have been left behind when it comes to van security and that criminals are taking advantage of these weaknesses, leading to an increase in expensive claims. While acknowledging the role manufacturers have to play Gabriel also stresses the basics that the operator needs to bear in mind.
“Vehicle manufacturers do need to stay one step ahead and digital security risks in particular will become more prevalent as the complexity of technology in vehicles increases,” he begins.
“In an ideal world the driver should never leave their tools or equipment in the vehicle unattended, but we appreciate that’s not always an option. If you are going to keep tools in your vehicle it’s best to get a lockable tool box, which can be secured to the vehicle. It won’t stop the thieves damaging your vehicle to gain access, but it will save your tools and the cost of replacing them. Fitting deadlocks, slam locks or lock protection plates can also help to prevent thieves from gaining access to your vehicle.”
Grimshaw also feels that the onus is on the operator: “The biggest issues are key security and van break-ins. We have all seen plenty of pictures of vans which have had doors peeled to gain entry. Retrospective locks, additional security and thought-through overnight parking are key ingredients to prevent this type of crime.
“Key security is another big issue. It may seem silly even mentioning it, but ensuring that whilst vehicles are unattended the keys are safely stored, not left on a site in a pocket or in a tool box, or even in the vehicle, will reduce the exposure to thefts. It is amazing how many claims we see which could be easily prevented with increased diligence for key security.
“Then, at night, keep keys stored safely, in a suitable location to prevent proximity keys being hacked, and vehicles stored safely to reduce the ease of theft. Thieves will look for easy targets and will move on should yours be more tricky than the next.”
Rising repair costs are also leading to higher premiums
Telematics
Some insurance companies offer the choice of a policy that includes a ‘black box’ telematics unit. Traditionally, this system has been offered to young car drivers, rewarding them for not driving after certain hours and other, low-risk behaviour.
“These policies work differently to traditional insurance policies where we look at a range of factors such as age, occupation, location and vehicle type to calculate a premium based on claims data,” says Gabriel, whose company, Admiral, has the Littlebox for Van product on the market.
“While these factors do play a part in telematics we also use electronically gathered data to calculate, and recalculate, your quote based on how good a driver you are. This helps motorists to get a price for their insurance based on how they drive, and 80% of our Littlebox customers do get a discounted premium at renewal. The device also includes a built-in theft tracker to help Admiral locate any stolen vehicles.”
Loyalty is rarely rewarded these days, and shopping around for the best deal at renewal can reap big rewards for the light commercial vehicle operator. Van supplier Vanarama is just one company which offers an insurance premium comparison tool for operators.
Adam Wigmore, insurance manager at Vanarama described the benefits it offers: “It lets potential customers access over 40 brands and check what the insurance for their target vehicle would cost.
Once they select the vehicle and obtain finance, we usually call them to see if our Multi-Year Insurance product (only available to Vanarama leasing customers) would be a better fit. It’s a premium that doesn’t change year-to-year (subject to conditions). This means no rising costs and no nasty surprises – just total control and no distractions from your business.”
Dashcams
Many operators now fit dashcams to their vehicles.
It’s a relatively cheap aftermarket option used by owner-drivers, keen to prove their innocence in any incident on the road, and also by corporate fleet managers who additionally can review evidence of alleged poor driving by their employees.
Richard Browning, director at leading dashcam supplier Nextbase, says: “Where dashcams really come into play is typically post-traffic incident. The footage captured can help determine exactly what happened. The when, where and how can be the difference between a lengthy insurance claim and getting the vehicle back out on the road.
“Companies are increasingly looking to protect themselves, and their assets, against the everyday risks associated with having vehicles out on the road by investing in dashcam technology.”
Browning states a startling stat when it comes to proving liability: “In 38% of all split-liability claims, video evidence would have changed the outcome to a non-fault. In other words, dashcams can offer massive time and money savings to any business with multiple vehicles – as well as protecting the individual drivers from fake and fraudulent claims made against them.”
Neil Grimshaw, director at independent broker Ravenhall Risk Solutions, is another who sees the advantages of utilising this type of technology: “The footage speeds up the claims process, allowing the insurers to take control of third-party claims before accident management companies get involved and inflate costs.”
On the subject of ‘crash-for-cash’ insurance scams, Grimshaw adds: “I don’t think it feels like there has been a reduction in these claims, but it does seem like there are more of these being found out and foiled by dashcam footage.”
