CommercialFleet

Insurance rate rises could hit hauliers hard says RHA

Insurance policy

The RHA is concerned that hauliers may be in for a surprise when the time comes to renew their insurance premiums since the Chancellor released details of a proposed change to the way that compensation payments are calculated.

The discount (or interest) rate used to calculate these payouts will be cut from 2.5% to -0.75%, to reflect the fall in inflation-linked government bonds since 2001, when it was last revised.

RHA chief executive Richard Burnett said: “The effect of the change will be to increase the amount insurers have to pay claimants to reflect today’s lower interest rates. But the cut is bigger than most insurers expected. They have no choice but to increase their premiums and motorists and hauliers will have no choice but to pay them.

“We are very concerned that the formula used to set the levels of compensation, the Ogden rate, should be reviewed and updated annually. This would ensure that compensation remains fair and reflects prevailing economic conditions. The reality is that it has been left unchanged for 16 years. This is both irresponsible and unfair as businesses with high motor insurance costs such as road hauliers could be seriously affected. “



Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Comment as guest


Login / Register

Comments

No comments have been made yet.

What's the tax liability on my van?

Calculate the BIK tax on any van on sale today with our van tax calculator

Track down the cheapest forecourts

Find the cheapest forecourts in your area with our van fuel price locator

How green is your van?

Check out the CO2 emissions for new vans with our CO2 calculator?