Fleet van insurance policyholders are facing numerous challenges as they move into 2018, with the costs and uncertainties of environmental regulations, legislation, taxes, insurance claims and insurance frauds all mounting, and if that’s not enough, the pre-Christmas period tends to be the busiest of the year for many fleets.
This is because Christmas is the season when couriers desperately try to get around town to deliver us our Christmas gifts and other essentials, often working twelve-hour days in the process. The outlook is much the same for tradespeople, with plumbers, decorators, electricians, carpenters and more all in a frantic rush to help the nation’s homes get ready for the Christmas period.
It hardly seems fair that at such a time, when our dependence on commercial vehicle fleets is never more obvious, insurance premiums have rocketed to a three-year high. This is an assertion founded on hard data: market analyst Consumer Intelligence reports that the price of the average van insurance premium rose by 30 percent in 2017 and now costs £1,214.
This rise is attributable to many factors. For example, the Insurance Premium Tax currently stands at a record high, while the Ogden rate, a statistical table that the government uses to work out the size of payouts for personal injury claims, has also had an impact alongside rises in other insurance-related costs, including fraud.
Love it or loathe it, Brexit has hardly helped either. The value of the pound has decreased and this has had an inevitable impact on the cost of vehicle repairs, as well as on the costs of vehicles themselves.
It is not all bad news though as younger drivers have seen some reduction in the price of average van insurance premiums. Consumer Intelligence reports that premiums are 2.6 percent cheaper for under-25s than in 2016. However, as the average van insurance premium for this demographic is £3,546, the small reduction in price is unlikely to be felt as much of a relief at a time when fleet van insurance policyholders are in serious need of some positive news around Christmas time.
Perhaps the good news will come early next year in the form of the government’s air quality plans. But before we get to this stage, the Government will likely face a High Court hearing in February 2018 over its apparently “persistent failure to deal with air pollution”. Law firm ClientEarth claims that the government is failing in its obligations and has called for a national network of Clean Air Zones (CAZs).
However, fleet managers have every reason to feel apprehensive about such proposals. Although it is of course in everyone’s interests to improve air quality, it is essential that the costs of meeting air quality targets are properly accounted for.
This means that if the government is to actively encourage a significant uptake of Alternatively Fuelled Vehicles (AFVs) it needs to ensure that there are sufficient incentives for fleet managers to make the changes. Additionally, it is clearly optimistic to the point of foolishness to imagine that there is currently an adequate infrastructure in place to support AFVs. For example, there are too few public charge points and van fleets cannot reasonably transition to AFVs until such time as there is.
Sure, there is some assistance provided for electric car purchases as well as grants to the most environmentally progressive fleet owners, but if the government is to get serious about the wide-scale adoption of greener fleets it needs to provide better incentives.
At the moment, there are very few electric or hybrid vans available and it is entirely unrealistic to expect most fleet managers to embrace them when there is so little choice; most simply don’t have the specs required for the job.
There are also concerns that the government is blindly implementing some European Directives without full consideration of their impact or indeed fairness. For example, the most environmentally-friendly Euro 6 diesel fleets risk facing penalties that, to most experts, seem disproportionate to their relative harmfulness.
Faced with these challenges at a time when they reach peak-busyness and peak-financial strain it is easy to see why so many van drivers and fleet managers might be somewhat stressed as we approach Christmas. Van drivers and fleet managers too often suffer from an unfair rap; perhaps it is time that we all blessed them with a bit of much needed Christmas spirit; it is up to the government and the insurance industry to take the lead in this regard.