Van drivers facing insurance hikes despite being safer
Published 04/09/2015 | 02:30
Van drivers are being hit with the same price increases in insurance premiums as car drivers, despite being involved in far fewer accidents and making fewer claims.
An analysis of insurance profitability shows that car drivers are more likely to have an accident and make a claim.
And insurance companies lose far more money on car drivers, but they are hitting both categories of driver with similar double-digit rises in premiums.
Motor insurance premiums have shot up by 20pc in the past year, the largest rise in a decade.
A breakdown of claims and the profitability of car, van and lorry drivers by broker InsureMyVan.ie shows most of the losses are from car drivers.
The managing director of InsureMyVan.ie Jonathan Hehir called on insurers not to penalise commercial drivers to make up for losses on car insurance.
Figures compiled by the Central Bank show that insurance firms lost €191m in 2013, Mr Hehir said.
But on van and truck insurance, the companies came close to breaking even, he said.
"Insurers have lost a fortune on car insurance. It was €191m in 2013, according to most recent figures.
"And an even greater amount of losses is expected for 2014. But they fared far better in the commercial vehicle insurance sector - losing less than €1m in the same period," he said.
He said insurers were increasing van premiums on renewals, a move not justified based on the claims experience.
"This simply appears to be a way of extracting more money from van drivers to offset against the losses incurred on the car insurance policies. This seems grossly unfair, particularly on the small business owners who are struggling to survive."
Mr Hehir added: "We are calling on insurers to simply charge for the risk. If certain categories of car owners are generating most of the claims, then they should bear the brunt of the premium increases."
He said he was generally able to switch van drivers affected by premium rises to another insurer to avoid the increase.
Insurance premiums are predicted to keep rising due to higher levels of claims, demands by regulators that insurers put more funds into their reserves, under-pricing of policies, and investment losses.