Do I need private or business van insurance?

Get the right insurance for you and your van.

When it comes to comparing van insurance, one of the first questions you have to ask is, how are you going to be using your van?

While it might be cheaper to get a private van policy, you will need to get a commercial van insurance deal if you use it in any way to make money.

We explain exactly who needs which type of coverage and walk you through what you’ll be covered for too.

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Private van insurance

If you’re only using your van for social, domestic and pleasure purposes, then you can opt for a private policy.

This might mean you use your van for a hobby, like surfboarding or tending to your garden, or use it for anything that isn’t involved with work.

Even if you’re a part-time DJ or a performer, if you use your van to transport equipment or tools on a regular basis, you’ll need a business insurance policy to get properly covered.

The picture becomes a bit murky when there are no tools or equipment involved, such as if you’re a car-boot vendor for instance.

If you go sell at a car-boot once in a blue moon, then you can get away with private insurance. However, if you do it regularly, then you might need a business policy.

Business van insurance

Even if you’re just driving your van to your place of work, you have to get a business van insurance policy.

It doesn’t matter if the job you do has nothing to do with the van whatsoever; the simple act of using it as transport to get to your place of employment is enough.

Now that’s cleared up, here’s a breakdown of the three types of business van insurance you might take out.

Carriage of own goods

This does what it says on the tin – it covers your own goods and belongings, such as your gym kit or your own tools. If you’re a plumber, a carpenter or a builder, this is the coverage for you.

It’s also the type of policy you need to take out if you use your van to commute to work, even if you’re a doctor or a teacher, or any other profession where you don’t have a work kit with you.

Carriage of goods for hire or reward

You should get this type of policy if you’re a delivery driver.

For example, if you’re a taxi driver, a courier or a furniture mover and are doing several drops throughout the day at a number of different locations, then you will need this insurance policy.

This protection will cover other people’s goods that you’re carrying for a fee.

It’s actually a legal requirement to have this if you’re in this kind of work, and there are penalties if you fail to comply.

Haulage

This is another type of policy aimed at drivers making deliveries. The difference is they work with clients on a regular basis by transporting goods on a regular basis at set times of the day. For example, you could be a delivery driver who supplies newspapers and drinks to an off-license every morning.

The reason this insurance is set apart from carriage of goods is that haulage companies can tell insurers exactly what they will be collecting and delivering, unlike couriers whose load changes every day.

What affects the cost of van insurance?

When it comes to working out your premium, insurance companies don’t randomly pluck a number out of thin air.

They use an algorithm and various different factors to work out how much of a risk you and your van are. Below are some of the ways the price of your van insurance is decided.

  • Van size. Larger vans with more powerful engines will have higher insurance premiums since they’re seen as more likely to be involved in an accident than smaller models.
  • Level of cover. You’d expect a fully comprehensive van insurance deal to be more expensive than third party, fire and theft. After all, you’re getting more coverage. However, this isn’t always the case, so shop around and get quotes for all levels of coverage.
  • Van purpose. Whether your van is for private or business use, you need to explicitly tell the insurer how you intend to use it. While business insurance may be more expensive, it could save you a hefty amount if your van and its contents are damaged or stolen.
  • Employment. Your job has a large bearing on your insurance costs. For example, the provider will view you as a higher risk if you drive at busy times like rush hour.
  • Where you live. From how busy the roads in your area are to the levels of local crime, location plays a key part in your insurance premium price.
  • Security. Parking your van in a garage or a secure place and fitting it with security features like an immobiliser are all ways you can drive your insurance down.
  • Payment. Paying for your insurance annually is typically cheaper than monthly as the insurer will charge more for monthly payments and hit you with interest fees.

Frequently asked question


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