Complete Guide to Van Insurance
Like any vehicle, it is illegal to drive a van on UK roads without a minimum of third-party insurance. In 2011, the Continuous Insurance Enforcement (CIE) law came into place, which means that you need to have your van insured even if you are not using it. The only exception is if you have a valid Statutory Off-Road Notification (SORN) registered with the DVLA.
In short: If you own a van and it is not SORN registered, you need van insurance.
Failure to properly insure your van, even if you are not currently using it, could result in a £1000 fine and even the possibility of having your vehicle seized and destroyed.
Understanding Your Van Usage
There are multiple types of van insurance, each designed to fit a certain type of van user. Before looking at insurance, it is important to know precisely how you intend to use your van.
Though this is quite rare for van use, it does happen that some people buy a van as nothing more than a convenient sized home runabout. This type of van use can be covered by social and domestic van insurance.
It does mean that you are not insured if you try to use your van for any sort of commercial or work purpose. While a trip to the tip to get rid of your old sofa at the weekend is perfectly fine, having a friend give you a tenner to dump his garden rubble is not, and you certainly don’t want to be seen signing up as a part-time Amazon deliverer!
Social and domestic use is just that – social and domestic! It’s ultimately the same as basic home car insurance although it is likely to come under more scrutiny – after all, if you have a convenient van, chances are you might use it for transporting goods.
If you have a job where you use the van on a regular basic, you need commercial van insurance. This type of cover is perfect for a work van used for carrying tools to jobs, or transporting your products to clients.
Commercial van insurance is the largest sector of van insurance and is likely to be the correct fit for most business needs. Within the bracket, however, is a lot of customisation – it is important that you discuss your exact situation and needs with your insurer to make sure you get the right level of cover. After all, a large van driver with a high top Transit is going to have different concerns than a plumber with a small Caddy van taking his tools to jobs.
A stretch beyond basic business insurance, courier insurance is there to cover the van driver doing a lot of daily driving delivering packages across the country.
Due to the considerable time on the road, plus the extra risk of theft (courier vans are extremely tempting for thieves, given the chances of them holding a large quantity of valuable goods), courier van insurance is unfortunately likely to be more expensive than other types of van insurance. It is, however, a legal imperative if you are undertaking this kind of work.
In addition to the level of van insurance, courier insurance often has extras which are work incorporating onto your insurance – breakdown cover, liability insurance for damaged goods or other issues and extra cover for the goods you are transporting are all available as part of a good insurance package for couriers.
Having the wrong insurance cover is never a good idea – while you may save a little on premiums in the short term, misrepresenting your vehicle use is fraud and could result in your claim being rejected or even prosecution. Always inform your insurer of your realistic van usage and don’t try to save on your van insurance by understating the work you are using it for.
Levels of Van Insurance Cover
Like standard car insurance, van insurance comes in three different categories:
Third-party (TP) insurance is in place to provide the minimum legal level of cover for driving in the UK. It covers only other people (called ‘third parties’) and their vehicle but provides no level of cover for yourself or your van.
Should you have an accident with third-party insurance, then the insurance company will pay for the damages done by you to other people and property (including damage done to the surroundings, such as sign posts, fencing etc.) but will not provide any financial compensation to you.
Third-party insurance is generally considered to be the cheapest van insurance, but it may be possible to find a better level of cover for a competitive, or even cheaper, price.
Third-party, fire and theft (TPFT) insurance covers everything explained above in third-party but adds cover for your vehicle should it becomes stolen or destroyed by fire. Note that additional fixtures and fittings (such as an added car stereo) may not be covered and you should check with your insurer if this is the case.
Fully comprehensive cover (FC), sometimes referred to as ‘fully comp’, is insurance that covers everything in TPFT and adds cover for yourself and your vehicle. For most van drivers, especially those who use their vehicle for business, it is especially important to get FC insurance to make sure that their business doesn’t suffer if an accident occurs.
The excess value is the amount you have to personally cover before your insurance company pays the remainder. For example, if you have an excess of £500, and the total amount of damages incurred in a crash comes to £3,000, then you will have to pay £500 and the insurance company will cover the remaining £2,500.
It is possibly to voluntarily increase the amount of excess associated with your van insurance, and in doing so you will save on your premiums. However, make sure you are happy with the level of excess as if you cannot afford to cover this amount yourself, any incident could end up with you being considerably out of pocket.
Of course, like all other types of insurance there are many ways you can save on your van insurance. Here are a few things to keep in mind:
1 – Size of van
It’s worth making sure you get the van that fits your needs and not one that is too big for the job. While it may be tempting to buy the biggest thing for your business with the attitude of ‘as we expand, the van will still be useful’, the truth is that you will probably spend more than you might gain later. Larger vans tend to have larger engines and are also more unwieldy to drive. Not only will your van insurance premiums be higher, but the chances are that you (or any other driver insured on the vehicle) are more likely to have an accident.
Get the smallest van that your business needs and don’t overshoot.
2 – Age of driver
Just like with cars, van insurance for young drivers is more costly. If your van is for a business and you are in the position where you can pick and choose the driver for the vehicle, consider restricting its use to the older drivers in the company.
Often, of course, it is impossible to be so picky and age simply plays an unavoidable part in raising the cost of insurance.
3 – Security features
Vans are a target for thieves as they are often left with expensive tools or products inside them and an opportunistic thief may well break in with the hope of finding something snatchable. Make sure your van is fitted with good quality locks and effective alarm systems and declare those facts to the insurer.
Other items, such as a steering lock, immobiliser or tracker, will all help bring down your premium.
If you use your van for business, painting your logo and business information on the side of the van also adds to its security – as it is harder to steal a van that obviously belongs to a business!
4 – The no-claims discount
First, check with your insurer if you can move your personal no-claims discount (NCD) onto your van. It is rare that this is done, but some insurers will take it into account and it doesn’t hurt to ask.
A company vehicle insurance will grow its own no-claims discount, so drive carefully and build this very important insurance discount.
5 – Voluntary excess
As mentioned previously, increasing your excess will lower your premium amounts. However, be careful when doing this, as in the event of a claim, a high excess will have a significant impact on your finances.
Always pick an excess you are happy to have to pay in the event of an incident.
6 – Mileage
Mileage is a factor in determining insurance premiums as the more your drive, the more likely you are to have an incident. Make sure you take the time to accurately estimate your mileage and if you think you are going to go over, contact your insurer to let them know. Keeping down your mileage goes a long way to lowering the cost of your insurance.
Don’t purposefully underestimate though – it’s always better to be honest!
Sometimes you don’t need to insure a van for a full year. Should you only be using a van for a short period – say a three-month contract with work, or even just a weekend to clear a house of rubbish, then short-term van insurance could be for you.
Quick to set up and delivering a cost-effective solution for a shorter term, temporary van insurance is designed to provide safe and legal cover to fit your needs.
With all these factors to take into account, getting the best deal for your van insurance might seem overwhelming. There are plenty of insurance brokers out there, or you can browse the rest of our motor insurance articles right here at Compare UK Quotes or more information.