If you use your van for work, then you need commercial van insurance. Commercial van insurance comes in three levels, just like other motor insurance, third party, third party fire and theft and fully comprehensive.
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About Commercial Van Insurance:
- What is commercial van insurance?
Commercial van insurance covers your van if you use it in relation to work or your business. Depending on the type of policy you choose, it compensates other people for damage you’ve caused, as well as damage to your own vehicle and tools.
Policy cover varies across providers, so it’s crucial to review all of the information provided in order to avoid any costly misunderstandings later on down the line. To help you make an informed choice about the cover you need, here’s what to consider when it comes to commercial van insurance...
- What levels of cover are there?
Just like other types of van insurance, there are three levels to choose from:
- Third party only (TPO) – this is the minimum you need by law. It covers the cost of compensating other people for injuries or repairing damage to their vehicles and property caused by you. It’s very often the cheapest type of policy you can buy but it’s vital to know that TPO does not pay to repair or replace your own van if it was damaged or destroyed.
- Third party, fire and theft (TPFT) – this provides you with TPO cover and will also compensate you if your van is stolen or damaged by fire.
- Comprehensive – this is the highest level of insurance you can buy and typically the most expensive. Comprehensive policies include TPFT cover but more importantly – they’ll also cover the cost of damage done to your vehicle, even if an accident is deemed your fault.
- Does commercial van insurance cover tools and parcels?
Generally speaking, commercial van cover doesn’t automatically cover any tools, equipment or parcels you carry or transport in your van. Some comprehensive policies might cover your personal possessions but only up to a certain value.
To protect the items that you carry, you can opt for additional cover known as goods in transit insurance. There are different categories to choose from to ensure your specific needs are met:
- Carriage of own goods – this covers any equipment you own and carry in your van in order to do your job. For instance, if you’re a plumber, carpenter or mobile hairdresser and travel with the tools of your trade.
- Carriage of goods for hire or reward – this covers your own things and will also cover other people’s items that you’re being paid to transport. Essentially, this is the type of insurance that you’ll need if you’re a courier or work in furniture removals.
- Haulage – similar to carriage of goods for hire and reward but on a bigger scale, this will cover cargo you’re carrying over long distances – typically involving a single drop off and collection point.
Make sure when choosing goods in transit insurance you chose the same category of use for your van policy.
- What other commercial van insurance features are there?
To give you and your van even greater all-round protection, you’ll usually be able to add other features to your policy – popular choices often include:
- Breakdown cover – if you rely on your van every day, don’t underestimate the importance of roadside assistance, after all, missed appointments or late deliveries could affect your reputation and bottom line.
- Courtesy van – if yours is off the road, a courtesy van could prove a lifeline, ensuring that it’s business as usual.
- European cover – if your line of work ever takes you across the channel, you’ll need to make sure you have appropriate insurance.
- Windscreen cover – this is sometimes included in comprehensive policies but if it isn’t (or you’ve gone for a TPO or TPFT policy) you should be able to add it on.
- Legal expenses cover – pays for legal fees if you’re involved in an accident that isn’t your fault and you want to claim for damages.
- What exclusions should I be aware of?
An exclusion is an event that isn’t covered by your insurance – almost all policies come with a set of exclusions, but they can vary according to the provider so always check the wording on your documents. That said, exclusions tend to be fairly similar and you’re highly unlikely to be covered for:
- Theft by negligence – for instance, if you left your keys in the van and it was stolen as a result.
- Wear and tear – providers rarely cover costs if your van or any parts need replacing simply because of age or are worn through natural use.
- Tools and equipment left in vehicles overnight – in many cases, your tools won’t be covered if they’re left in your van overnight. You can increase your level of cover to include this, but you’ll probably be expected to meet certain conditions, such as keeping your van securely locked or putting tools in a lock box. Alternatively, you may decide to take out separate insurance specifically for your tools.
- How much does commercial van insurance cost?
Policies are designed to meet your specific needs, so cost can vary considerably. Some of the factors providers will consider include:
- The level of cover you choose and the category of any goods you carry – the more comprehensive the policy, the higher your premium is likely to be.
- Van security – secure vans pose less of a risk when it comes to opportunistic theft which his often reflected in what you end up paying. If you can, keep your van in a locked garage and don’t keep tools or valuables in it overnight.
- Your age – the younger or more inexperienced you are, the more you can expect to pay. Some providers may even set a minimum age for van insurance (for instance, you must be 21 or over).
- Any optional extras you include – the more you add, the more expensive you can expect your policy to be.
- Do I need commercial van cover if I have private van insurance?
It will depend on how you use the van.
If you use your van for work, then yes – you’ll almost certainly need to take out a new van insurance policy that covers commercial usage, or upgrade your existing policy to give you the level of cover required.
However, if you don’t use the van for business, then you need to be aware that unlike car policies, van policies don’t usually offer a ‘social, domestic and commuting’ option. This means that if you use your van to commute to work (even if it’s to the same office every day) you’ll need to choose the correct use on your van insurance policy.
On the whole, insuring a van for private use is only suitable if you’re using your van for purely domestic reasons – for instance doing the school run, the weekly food shop, visiting friends and family or using your van for holidays.
Whatever the type of policy, it’s essential to check what your provider's definition of private use and commercial use is. Driving with the wrong sort of insurance could end up invalidating your entire policy which means you won’t get any compensation if you need to claim and could lead to points on your licence, or worse.
- How can I lower the cost of commercial van insurance?
Cost will always be an important part of any decision you make about van insurance but it’s imperative to think about what’s covered by the policy.
So, while cheaper policies might catch your eye, take the time to check they include what you need. You may be surprised to discover that some pricier looking packages actually work out cheaper by the time you’ve added ‘optional’ features to a third party only policy (for example).
Of course, there are ways to lower the cost of cover, such as:
- Pay for policy in one go rather than instalments – you’ll save on interest fees.
- Only include features you need – it’s important to cover your needs but opting for features you’re unlikely to use is a waste of money – for example European cover if you never use your van abroad.
- Build up your no claims bonus – the more years of no claims you have, the bigger the discount on your overall premium so think twice before claiming for tiny scratches no one else but you can see.
- Increase your voluntary excess – doing this can lower your overall premium but it should still be affordable as you’ll need to pay it for a claim to go ahead.
One of the best ways to find the protection you need at a price that suits your budget is to start a search for commercial van cover right here at Asda Money.
Top Van Insurance FAQs:
- What's included in a comprehensive policy?
Comprehensive van insurance is the most extensive van insurance policy, usually covering any accidental damage to the vehicle, damage to third party vehicles, third party personal injury, fire, and theft.
Actual coverage will vary depending on the policy you choose, so make sure to check what your policy includes before you buy it by reading the terms carefully or speaking to your chosen provider.
- Can I have more than one person on a single policy?
Most brokers will allow you to choose a policy that covers multiple drivers for one vehicle, although this will usually raise the price of the insurance.
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