Excess on the rise, but can drivers afford to crash?

Many self-employed and sub-contractor van drivers are risking what, to them, seems like a safe gamble in order to try to get cheaper van insurance, according to details in a recent report by insurance giant Axa.

Rather than suffer regularly monthly bills, which some would say have been disproportionately raised in recent times, in order to get the cheapest van insurance quotes they are prepared to run the gauntlet by committing to higher excess fees in case they do have a major road traffic accident. What that means is that they will have to stump up a higher contribution to the final bill, making it less likely that – or at least reducing the extent to which – the insurance broker will have to put their hand in their pocket when it’s time to settle up.

Almost ten percent of all drivers have chosen this option over the last two years, according to Axa. Where van drivers may score points over their domestic peers is, even though they are on the road for a greater deal of the time, their driving expertise is much greater, especially for those who drive light commercial vehicles. You may think that greater exposure on the roads would lead to a more expensive vehicle insurance bill, but van drivers are time-honoured and statistically less likely to make a claim on their van insurance policy.

The further cause for concern from Axa lies in the fact that domestic drivers who seek to reduce their monthly outgoings by risking a higher excess are not perhaps taking this measure as a long-term commercially sound saving but because other financial commitments leave them no choice. Assuming that argument is true, it is highly unlikely that drivers will have the funds put by to meet the high excess they’re opting for, which may mean that they’ll not be able to have the vehicle repaired in case of an accident causing the vehicle to be off road.

Axa even has a theory as to the percentage of drivers who are looking for cheaper insurance for their car or van in this manner: almost three in every ten, 29%, have little or no savings; those who have less than £200 put aside, the insurance company believe is greater than a third, the figure they’re estimating being 34%.

This could lead to two worse eventualities, other than the driver being left without transport:-
1. They continue to drive in a potential death-trap, at which point any further cover will be negated;
2. The vehicle is left in the garage for up to thirty days (the entitlement drivers have from date of accident to making a claim) with the damage worsening, compounding the impact of the accident, causing an even greater repair bill. The number of customers postponing or delaying an accident claim in this manner has also risen, according to the report.

Theoretically, if a commercial driver only has a small, regular round and encounters little traffic (I’m thinking Postman Pat, here), increasing voluntary excess could be a worthwhile gamble. Or, as a businessman, building up enough cashflow to create an emergency kitty to meet the contributory value stated at the time of the van insurance quote before troubling the insurance company could also be viable.

But the fact remains, there is absolutely no point in taking out cheap van insurance if the conditions you choose are unsuitable when you need the policy’s cover most.

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