Half a million claims blamed for van insurance rise

Despite price comparison sites being utilised more and more by domestic and commercial users alike, this enforced competition has still not been able to reduce the cost of car and van insurance in the UK.

The continuing trend, compared with inflation, is so disproportionate that the Office of Fair Trading is investing the reasons why the theory that exposure to competitor rates will secure cheap van insurance for the UK’s struggling business remains mythical.

Based upon information gathered earlier in the year by the AA insurance premium index, fully comprehensive vehicle insurance rose, on average, a staggering 40% in the financial year ending March 2011. If only that were true across the board, it wouldn’t be so bad for the aspiring apprentices of this world.

Rather than being cheap, van insurance for young drivers up to the age of 22 is between 64-80% more than in the previous year. It seems that what the government are trying to achieve by getting apprenticeships back up and running across the UK, van insurance in its own rite may deter youngsters from considering this career choice as a viable option.

With a weekly wage of £95.00 for those learning the ropes straight from school and their average annual van insurance being calculated at £2,341 (or £45/week), that leaves just £50/week, or £10/day, or £1.25/hour, based on an eight hour day. After paying for the fuel and the van insurance, could you imagine any teenager being tempted into a plumbing or construction apprenticeship, if they were expected to pay for a van, insure, tax and MOT it and buy the fuel?

More government intervention in September, by banning insurance referral fees in England and Wales is also intended to encourage cheaper van insurance rates; in an attempt to curb the ‘no win, no fee’ culture that is one of the main causes the insurance providers cite to justify the rises, it is hoped that these savings will be passed back on to the public and business sector.

With the backdrop to a lack of cheap van insurance policies being a doubling in payouts in the last decade, from £7bn to £14bn, it is possible to see where the Justice Minister believes that the rise has come from fraudulent claims and the system allowing it to happen.

The findings of the OFT are expected in December, so let us see if they believe that businesses up and down the country have been charged too much for their van insurance. I think we may already know the answer.