What Is Van Insurance And How Does It Work?

Find out how a good van insurance policy can protect your business if something goes wrong with one of your commercial vehicles

Van insurance covers you against all kinds of risks relating to owning and driving a van, in the same way that car insurance protects car drivers and users. Many people mistakenly think that their car insurance policy will cover their van, which is rarely the case. Van insurance can cover you if you end up in an accident, and can also help you repair or replace your vehicle quickly and efficiently to keep your business on the road in the meantime.

All drivers legally need insurance when they drive a vehicle in the UK. If you drive a van for business, you will need a specific business or commercial van insurance policy to cover your business endeavors. Some policies may be able to insure you for both private and business use.

Get up to speed with all you need to know about van insurance in the following guide:

  • What is van insurance?
  • Do I need van insurance?
  • What does it cover?
  • What type of van insurance do I need?
  • How much does van insurance cost?
  • How to find a van insurance provider
  • Final thoughts & FAQs.

What Is Van Insurance?

Van insurance works similarly to a car insurance policy, insuring you against a plethora of different risks associated with your van. Vans aren’t often covered by your typical car insurance policy, particularly if you use it for commercial use or other business reasons.

Van insurance can cover third-party costs should you have an accident. It can also pay out to cover the costs of repair to your van. In some cases, it can cover you against filling up with the wrong fuel or even losing your keys, depending on your policy. Van insurance policies can cover most types of van, including:

  • Box Luton vans
  • Pickups
  • Double or single cab vans
  • Tippers
  • Light vans.

Do I Need Van Insurance?

The short answer is, yes. You cannot legally drive your van on the roads without insurance, just as you cannot drive a car without insurance. If you fail to take out van insurance or drive your van without a valid policy, you could face court prosecution and a fine. Van insurance is relevant for people to which any of the following apply:

  • if you use a van privately for commuting or social purposes
  • if you use a van as a sole trader
  • if you use a van commercially or as part of a business.

There are two types of van insurance policy: a personal van policy and a commercial insurance policy. The former is suitable if you only use your van privately. If you use it for work, however, you will need to opt for a commercial van insurance policy.

What Does It Cover?

Van insurance can cover you against third-party costs if you are involved in an accident. Typically, van insurance can also pay out and cover the costs of repair to your van, and sometimes the replacement if it is written off or if you need a replacement vehicle while you wait for the repair.

Commercial van policies typically offer extended cover, sometimes related to the contents of the van or the purpose for which you use it. The events covered under your policy will depend on the type of cover you choose.

Key Exclusions

Depending on the type of policy you go for, you can get cover for a whole host of risks associated with your vehicle. That said, most commercial van policies won’t cover you for any of the following, no matter your level of policy:

  • damage resulting from wear and tear
  • mechanical or electronic failure
  • theft if you leave the keys in your vehicle
  • theft of personal items or tools if you leave the van unlocked
  • goods or stock you are carrying unless you add specific coverage for this (if you want to cover this, you’ll need to look into stock insurance).

What Type Of Van Insurance Do I Need?

There are several types of van insurance cover you can select when taking out a policy. The policy you opt for will depend on the kind of van you are insuring and the purposes for which you use it.

There are three principal types of commercial van insurance, which are:

  • Carriage of own goods. This type of insurance is suitable for anybody who uses their van to carry tools and material to jobs, which is usually the case for tradespeople. Examples might include a joiner or a self-employed plumber who uses a van to carry their tools to and from their jobs. While tradespeople will be covered while taking their tools between jobs, the tools and materials themselves don’t tend to have cover under this policy. The same goes for any other contents in your van. If you are looking for protection for your materials or the contents of your vehicle, consider taking out a goods in transit policy, too.
  • Carriage of goods for hire or reward. This type of cover is often suitable for anyone who delivers goods to multiple different destinations and along differing routes. The goods don’t belong to the driver, but rather the customers. Insurance for the carriage of goods for hire or reward also tends to cover the goods inside your van.
  • Haulage cover. This type of cover is specific to delivery drivers who deliver single items/orders, typically over long distances, to a set location, such as expensive machinery. A haulage policy also tends to cover the goods you are delivering as well.

Once you’ve decided on the type of cover you need, you will need to determine what level of protection is suitable for your needs. Generally, the levels of cover are:

  • Third-party only cover. This type of policy covers the cost of damages to another person, their vehicle or their property which is the result of you driving your van. An example might be rebuilding costs if you reverse into somebody’s garden wall or the cost of replacing somebody’s wing mirror if you knock into it while parking. The third-party only cover excludes any damage to your own vehicle.
  • Third party, fire and theft (TPFT) cover. Third-party, fire and theft cover insures you for the same events as third party only cover, but it also covers the loss or damage to your own vehicle, provided the damage is caused by fire, lightning, self-ignition, explosion, theft or attempted theft. If you cause any accidental damage to your own van, this would not be included on TPFT cover.
  • Comprehensive cover. This type of policy covers your van for any accidental damage, as well as third parties and their vehicle and property if you have an accident. Comprehensive cover tends to include any fire damage and can cover some of the costs if your van is stolen.
    On top of these types of cover, many insurers offer more specific policies for other purposes. These types of insurance may be suitable for particular businesses.

Van Insurance For Young Drivers

Van insurance can be expensive, no matter how old you are or how much experience driving you have. However, those hit with the highest premiums are younger, inexperienced drivers, sometimes having to pay double the price of an experienced driver. According to the road safety charity Brake, 23% of motorists aged between 18-24 have involvement in a crash within the first two years of passing their test. These statistics mean that any type of vehicle insurance, but especially van insurance, is even more expensive for younger drivers.

Some insurance providers now offer specific policies tailored to younger drivers to help them find insurance at a reasonable price. Most insurance providers consider anyone under the age of 25 to be a young driver in the UK.

Fleet Van Insurance

This type of policy provides insurance for two or more vehicles owned by the same business. Fleet insurance is a handy type of insurance for business owners who want to deal with the insurance for their vehicles under one policy with a single renewal date and ensures a consistent level of cover for each vehicle.

Under this type of policy, you can usually insure different makes and models of van, provided you inform the insurance provider of the details of each vehicle. How many vans you can insure under a fleet insurance policy varies between providers, but can be up to the hundreds, or even thousands.

Business owners tend to opt for a fleet van insurance policy as it’s easier to keep track of all their insurance policies for multiple vehicles in one place. Aside from the convenience, fleet van insurance tends to be cheaper than insuring all the vehicles individually – particularly if a company has tens or hundreds of vans to insure. Not only that, but many fleet policies include coverage for any drivers, meaning any of your employees will be able to drive any van in the fleet, reducing the hassle for business owners. However, as the insurer has no information about the drivers they’re insuring, this typically boosts your premiums.

Most insurance providers will allow you to insure a variety of van types on a fleet policy, including:

  • pickup vans
  • tipper vans
  • Box Luton vans
  • light vans
  • vans with single or double cabs.

Some providers even include an ‘any vehicle’ clause in their policy, which may mean you can insure commercial vans and cars under the same insurance. Another thing to note is that not all providers will allow you to have drivers under 25 on your policy, or over 70. Make sure you check with your provider so that you know the ins and outs of the cover provided before you consider a fleet insurance policy for your business.

Pickup Insurance

For most insurance purposes, pickup trucks are categorised as vans. If you use your van for business purposes, whether that’s for using it to transport goods over long distances, carrying your own tools between jobs or delivering products that don’t belong to you in return for money, you will need a business pickup insurance policy.

Pickup van insurance works in the same way as a regular van insurance policy, meaning you can choose your level of cover from third party only, third party, fire and theft, or a fully comprehensive policy.

Modified Van Insurance

You must declare any modifications you make to a vehicle to your insurance provider. This makes sure that the policy you have taken out matches the van insured so that you retain your cover in all eventualities. While modifications in cars tend to come in the shape of a performance upgrade, such as a turbocharger or a spoiler, modifications in vans tend to be more practical in nature. You might add new seating, beds, storage or other features which make it fit for your business needs.

Although a modified van shouldn’t put you at a higher risk of having a crash, insurers tend to consider modified vehicles as higher-risk owing to their heightened appeal to criminals and the potential for higher risk of fire. Modified vans tend to come with higher premiums, which is why many insurers are now offering dedicated modified van insurance policies. What’s more, if you fail to declare your modifications under your regular van insurance policy, your insurance may be invalidated, which would leave you liable in the event of an incident.

Examples of modifications generally include the following:

  • Cosmetic changes such as adding spoilers or body kits
  • Racking and storage
  • Adding or removing seats or windows
  • Adding different power supplies
  • Alloy wheels
  • Refrigeration, common for food delivery businesses
  • Tippers
  • Lifting equipment
  • Permanent jet washing equipment
  • Permanent catering equipment
  • Audio or entertainment upgrades.

How Much Does Van Insurance Cost?

The average van insurance premium in 2019 was £1,698.79, according to Confused.com. Generally, van drivers can expect to pay significantly more than they would for standard car insurance. There are several reasons for this:

  • Vans have larger engines, and are therefore more expensive to repair should things go wrong.
  • Vans are larger generally, meaning they can also cause more damage in an accident
  • Vans tend to carry more valuable cargo, such as tools, materials and equipment.

How much you pay will largely depend on the level of cover for which you opt. Third party only cover is typically the cheapest option. However, many insurers consider this a low level of protection, and may not be suitable for everyone.

What you use your vehicle for, and where, are also significant factors which play into the cost. If you operate in urban areas with high crime rates, your insurance is likely to be more than if you work in a more rural area. All these factors increase the risk for the insurer, which is why they bump up your price.

Other factors which affect the cost are similar to those that have an effect on a regular car policy. Younger, inexperienced van drivers will pay more than their older counterparts, as they have a statistically higher risk of having an accident and needing to make a claim. As vans are larger than most cars, those new to van driving are also at a higher risk of having an accident, which may also mean they pay more.

How Can I Get Cheap Van Insurance?

While van insurance is expensive, there are some things you can do to lower your costs. Smaller vans tend to be cheaper to insure than larger ones, for example, which is worth bearing in mind before you purchase a van. The most significant factor comes down to the size of the engine, so if you’re looking to lower the price of your policy, consider a van with a smaller engine.

When you fill in your details to obtain an insurance quote, you will also be asked whether your van has been modified. As they tend to pose a higher risk, most insurance policies will be more expensive for modified vans.

How Can I Reduce My Premiums?

Van insurance is one of the more expensive vehicle policies on the market. There are several things you can do, however, to save yourself some money on your policy:

  • Avoid over-covering yourself. Many van insurance policies come with optional add-ons such as personal liability or breakdown cover. Many drivers don’t realise that they already have protection for some of these elements through their business bank, or another insurance policy they own.
  • Secure your vehicle. You may be able to reduce your premium if you can prove to your insurer that you have taken extensive security and safety measures to secure your vehicle. Examples include installing anti-theft devices or parking your van in a secured garage.
  • Limit your van usage. Some insurance providers offer reduced premiums if you commit to capping the amount of time you spend driving your van. The less time you spend in the van, the less of a risk there is to the insurer.
  • Opt for a higher excess. As with any insurance policy, the higher your excess, the lower your premiums will be. You can volunteer to raise your excess to lower the amount you pay each month. It’s essential, however, to make sure that you can afford your excess if you were to have an accident.
  • Pay upfront. Paying in monthly instalments tends to act as a loan repayment, which usually ends up being more expensive. If you pay your insurance annually, you can usually make a considerable saving.
  • If you’re yet to buy your van, consider opting for a less powerful one. The more expensive the vehicle, the more expensive your insurance will be.
  • Get your quotes in early. According to Confused.com, nearly half of van drivers leave their insurance shopping until about a week before they need to renew their van insurance. This means the drivers are more likely to go for a more expensive deal out of urgency and convenience. Not only that but getting a quote several days before your policy is due to start can bump up the price by 32% – so it’s well worth getting a quote several weeks in advance. The general rule of thumb is to seek out quotes three weeks before the date you need your policy to begin.
  • Weigh up claiming for small amounts. If you have a No Claim Discount, it may be more cost-effective to pay for small amounts yourself, rather than to submit a claim on your policy and lose your no claims bonus.
  • Shop around. The lowest premiums and best deals are usually reserved for new customers, which means if you auto-renew with the same provider, you may find your premiums rising. To keep your costs low, consider changing providers at the end of your contract.

How To Find A Van Insurance Provider

As one of the more expensive vehicle insurance products on the market, finding van insurance can be a headache. The best trick for finding the best deal is to leave enough time to do your research. If you leave it until the day before you need it to buy a policy, you’re looking at a far more expensive premium than if you give yourself a month to shop around. Fortunately, you have several options when it comes to finding van insurance.

Going Directly To An Insurer

Almost all van insurance providers advertise their van insurance products online, and most of them can generate a personalised quote within a matter of minutes. If you’re looking for particular cover features or have any specific queries, you can phone the insurer directly and speak to one of their sales advisers, who can give you advice on a policy suitable for you. This is particularly helpful if you aren’t sure whether to get cover for carriage of goods for hire or reward or haulage cover. Insurers will be able to recommend a product to you based on your specific commercial needs.

Going Through A Broker

Van insurance is expensive, and finding a policy offers you tailored cover for a reasonable price is no mean feat. Going through a broker gives you the advantage of added support, industry knowledge and usually better prices. Not only will they know what kind of coverage is out there allowing them to build a plan which works for you, but they usually have access to far more competitive prices than those offered directly to customers. Even after taking a cut of commission, you could find yourself with a much better value deal than if you’d approached an insurer directly. Make sure that you use a broker regulated by the Financial Conduct Authority.

Comparison Websites

Finally, you have the option to go through a comparison website. Most of these sites will enable you to filter the results by the level of cover provided, the price or other features, helping you see the best deals for you, all in one place.

What You Need For A Quote

Most providers will issue you a quote online in just a few minutes. Make sure you have the following information to hand if you want to generate an accurate quote:

  • your occupation
  • the number plate of your van
  • van modifications
  • the yearly mileage
  • the type of license you own
  • claims, points or accidents
  • any additional drivers.

Final Thoughts & FAQs

Whether you’re a sole tradesperson or a business owner with hundreds of vehicles, insurance is a legal requirement for any vehicle on the road. You must have valid commercial van insurance if you use your van for business purposes, as many people mistakenly think that their private van insurance policy, or even their car insurance policy, can cover them.

Inadvertently invalidating your insurance could lead to costly claims and payouts, or even legal action. Taking out a good van insurance policy can help keep your business on the road when something goes wrong.

Still have questions about van insurance? Check out answers to some of the most common queries, below.

What Are Van Insurance Groups?

Every van is assigned to an insurance group based on its risk factor, with the cheapest being level one. Factors affecting the group include the size, weight and performance of the van, as well its current market value and how much it will cost to carry out repairs.

Van insurance groups are a significant factor contributing to the price of your policy, as many insurers use the insurance group to determine their premiums. Opting for a van in a lower insurance group might help keep your premiums lower, though bear in mind that other factors such as where you park your van, how many miles you drive and whether van has been modified will also have a knock-on effect on the price.

What About Van Contents Insurance?

If you use your van for business purposes, there’s a good chance that you’ll have some tools, equipment, merchandise or other materials in your van that are expensive to replace. If you are concerned about loss or damage to items that you store in your van, you will need to add contents to your insurance policy.

Most providers will offer van contents as an optional extra, though some comprehensive policies may include this as standard. Covering items in your van will increase your premium, so it may be worth taking your tools out of your van at night.

Can I Get Short-Term Or Temporary Van Insurance?

Yes, it is possible to buy short-term van insurance. Typically, a short policy ranges from 1 to 28 days, but some providers can offer short-term plans for up to six months at a time. Short-term insurance is usually available for people aged 19 to 75 for light commercial vehicles and vans up to 3.5 tonnes.

It can be useful if you’re hiring a van for a day, to move house, for example, or to carry out a job that requires a bigger vehicle if you use a van for work. Short-term van insurance can also be a cheaper option for those who work part-time or only in certain seasons.

Do I Need Car Insurance Or Van Insurance?

If you aren’t sure whether your vehicle constitutes a car or a van for insurance purposes, you can check your V5C vehicle log book. A vehicle categorised as M1 requires car insurance. An N1 or N2 vehicle requires van insurance.

Can I Take My Van Abroad For Business?

Many commercial van policies do include cover for business abroad, but this may not come as standard. In some cases, you may have to add this cover to your existing policy for an additional cost.

Make sure you speak to your insurer directly if you are going to take your van abroad for business purposes, to see if the policy covers your destination country. You may want to consider European breakdown cover if you are driving your van abroad, which you can either take out separately or add onto your current policy.

Can I Get My Company Van Insured Under My Business’ Name?

If the business owns the van, then you can usually find an insurance provider who will insure the van under the name of your business. However, not all providers are willing to do this, in which case the main driver must be the policyholder and the owner of the vehicle.

Can I Transfer My No Claims Discount From My Car To My Van?

Unfortunately, most providers do not allow you to transfer a no claims discount built up on a car insurance policy to a van policy. You would have to build up a no claims discount on a van insurance policy if you wanted to transfer them to a new policy or a new provider.

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