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Van insurance explained

What is van insurance and why do I need it?
Since the Government brought in the Road Traffic Act (1930), van insurance has become a legal requirement for all drivers on the road. Therefore you are legally obliged as a driver to be insured against the possibility that you may injure another person or cause damage to another person's property. For example if you reverse your van into someone else's vehicle, your van insurance will pay for the repairs to the vehicle. Anyone who does not have van insurance could receive a fine or driving ban if they are caught.

How do insurers protect the victims of uninsured drivers?
In 1946 the Motor Insurers' Bureau was set up to provide a way of compensating the victims of uninsured or untraced motorists. All motor insurance companies must be members of the Motor Insurers' Bureau and contribute to its funding.

So if an uninsured or untraced driver injures you or damages your van, you should receive compensation from the Motor Insurers' Bureau.

The basics to van insurance

What documentation or paper work will I get?
Once you have taken out your van insurance policy, your insurance provider will send you:

A certificate of insurance (or a cover note which is a temporary certificate)
A schedule and/or policy document
A policy booklet (or they will tell you where you can access one)
Your certificate is a very important document as it is evidence that you are legally insured and is one of the documents that police will ask to look at if you are stopped while driving.

A cover note may be supplied if the insurance company or broker needs time to complete the paperwork. This will give you the same protection as a insurance certificate but is only usually valid for 30 days.

Key things to remember!
Always read all the documents sent to you to make sure all the details are correct and that you have the level of cover you need. If you have any concerns or queries contact your broker or insurance company.
Ensure that you give the correct information to the insurance company or broker; otherwise your insurance may not be valid. If you do not, it could result in the insurance company not paying out if you were to make a claim.
Tell your insurer or broker everything that relates to you as a driver or road user, such as driving history, claims and convictions.
Keep all your policy documents in a safe place; you never know when you may need them!
What's included in my policy?
What your policy covers depends on what type of cover you have chosen and any additional cover you may have bought. The documentation you receive with you insurance policy should outline exactly what is covered.

What types of policy are there?
There are three main types of policy which each offer different levels of cover.

Third Party Only (TPO)
This van insurance is the minimum level of cover required by law in the UK. It covers:

Liability for injury to others (including passengers)
Damage to property
Liability whilst towing a caravan or trailer
Remember! This does not cover you for accidental damage to your own vehicle; you will have to pay for that yourself.

Third Party Fire and Theft (TPFT)
This covers everything that third party covers, plus:

Fire damage
The theft of your own vehicle
Damage to your van caused during the theft
Comprehensive is the most extensive van insurance cover and includes everything third party fire and theft does and usually the following:

Loss or damage to your vehicle
Windscreen cover
Personal effects
Accidental damage
Medical expenses
Remember! Some van insurance companies are now offering cheaper policies that offer less protection. These may be known as 'stripped down' policies, for example the insurance company may have removed windscreen cover. Always check your policy documents to make sure you get the right level of cover for your needs.

What is an excess?
An excess is what you are liable to pay towards any claim. It usually has to be paid to the garage that is fixing your van once the work has been completed and the van can be driven away.

For example if you damage your van by reversing it into a fence, this is known as accidental damage. So if your accidental damage excess is £150 and the cost of repairing your van is £400, you would pay £150 and the van insurance company would pay £250.

There are two main types of excesses:

Compulsory excess
Is set by the insurance company
Depends on the details you provided to them when you took out your policy
Higher excesses are more likely on policies with young drivers or high value vehicles
Voluntary excess
When you take out a policy, you choose to pay more towards the cost of a claim
Generally reduces the price of what you pay for your insurance when you buy it
Is paid as well as any compulsory excess
Remember! Excess will vary depending on which van insurance company you choose. Usually if you opt for a higher excess the van insurance quote will be cheaper.

What about no claims bonus?
No claims bonus is a reward for people who don't make a claim on their policy. Van insurance companies will usually give a discount for claim free driving. However even if it is not your fault but you claim on your van insurance policy, it will affect your no claims bonus, unless you can recover the costs from the other driver's insurance company.

No claims bonus basics
For every fault claim you make, you lose 2 year's bonus.
Most insurance companies have maximum no claims discount levels; these are commonly 4 or 5 years.
You can usually protect your no claims bonus once you reach the maximum level.
If you protect your no claims bonus and make a claim, you do not lose your bonus and you will still receive a maximum discount on your policy.
Mirrored bonus
Some van insurance companies will give no claims bonus discount to those getting new policies if they can prove they have a no claims discount on another vehicle or your company can vouch that you have no claims history whilst driving the company vehicle. So why don't you ask!

How do I make a change to my policy?
If you want to change anything on your policy, for example your address, you need to tell your insurance company so they can update their records. There is usually an admin charge for changes to van insurance policies. Also beware that your premium may change depending on what change has been made.

Remember! You must tell your insurance company if your details have changed as they may not pay out on a claim if you don't.

What if I cancel my policy before it has ended?
You may be charged for the remainder or a percentage of your van insurance policy if you choose to cancel. You may also have to pay a cancellation fee; these fees may vary depending on the van insurance company. You can find out the amount that the cancellation fee could be in your van insurance policy booklet.

Remember! You need to phone your insurer to cancel your policy.

How do I make a claim on my policy?
You need to tell your van insurance company as soon as you can when you have had an accident or if your van has been stolen, even if you are not going to claim.

If your van needs repairing once the insurance company has all the details of your claim they will inform you of the nearest approved repairers and arrange for your van to be repaired. An approved repairer is a garage that your van insurance company has a relationship with to do repair work on their behalf. If you do not go to an approved repairer then your insurance company may not pay for the repairs.

Optional extras for van insurance

Van insurance policies can differ, so make sure you check your policy documents to see what is included as standard on your policy. You can also see what optional extras are available.

Legal protection
Covers legal costs if they arise from an accident which happens whilst you are driving.
Helps to recover uninsured losses (such as solicitors fees etc) from the other driver's insurance company if you were involved in a non fault claim.
Can arrange for a solicitor to pursue the claim for compensation if you are injured.
Generally helps with the recovery of the excess on your policy, medical losses or loss of earnings - very important if you are self employed.
Breakdown cover
Assists in getting your van back on the road or to a garage if you breakdown. There are different levels of covers such as:

Recovery/Relay - if your van can not be fixed locally you will be taken to any mainland destination.
Home Start - this covers you if your van breaks down at home or near your home.
Onward Travel - if you breakdown away from home and your van can not be repaired quickly, you will generally be provided with either a replacement hire vehicle or overnight accommodation or reasonable onward travel expenses.
European Cover - breakdown protection when driving in Europe, usually 31 days per trip and 909 days per year in total. However you will need to check with your provider which European countries you will be covered in.
Insurance while driving abroad and green cards
A green card (which can be obtained from your insurance company) provides basic Road Traffic Act cover for driving while on holiday abroad.
Recognised in over 40 countries. Once again, contact your insurance company to check which countries are covered.
Please note, insurance companies may charge for extending the same level of cover you have abroad as you have at home.
Courtesy van cover
Basic cover provides you with a van if you have an accident and needs repairing.
An enhanced policy will provide you with a replacement hire vehicle if your van is stolen or written off.
Personal accident cover
Basic cover provides a small payout to you or your passengers for a limited set of injuries like; permanent and total loss of sight in one or both eyes, loss of or permanent damage to one or more limbs.
Personal accident cover will also cover death.
Enhanced cover increases the financial payouts you receive.
Windscreen cover
Covers repairs to chips and cracks in your windscreen.
Replace your damage windscreen.
Windscreen cover may often be included in comprehensive insurance policies.

How van insurance quotes are calculated

Insurance companies will ask a series of questions to everyone who is interested in taking out a van insurance policy. By doing this, the insurance company can identify what risks they are taking on.

Generally, insurance companies evaluate the same factors when calculating van insurance prices, but as no two risks are identical prices can vary from one company to another.

Main factors they look at:

Van insurance group
All vehicles have a group rating given to them by The Association of British Insurers (ABI) † . The ratings are based on the risk of the vehicle, they are factors such as:

The value of the vehicle.
How much damage could be done to the vehicle and how much the parts would cost to replace/repair.
Performance, acceleration and top speed.
Whether the vehicle has a security system in place.
Claims history
Insurance companies will need to know about your claims history usually for the last 3 - 5 years. The more claims you have the more expensive your insurance policy is likely to be.

Remember! The insurance company will need to know about all your claims regardless of who is to blame.

Insurance companies will look at the drivers that you wish to be covered on your policy. Depending on the experience of the additional driver there may be an extra charge to your policy.

Driving convictions
Driving convictions will also be a factor that insurance companies rate on. If you or an additional driver has a conviction on your licence then insurers consider you to be a greater risk on the road than a driver with no convictions. The insurance company usually considers driving convictions in the last 3 to 5 years.

Depending on the seriousness of the conviction will influence the extra amount your insurance company will add to the premium. Serious convictions may cause an insurer to add special terms to a policy or even reduce the amount of cover they offer you. Find out more about convictions.

Medical conditions
Insurers cannot charge extra for medical conditions if you hold a licence without restriction. If you do hold a restricted licence your insurer may need to take this into account when reviewing the risk.

Everything that may have an effect on your ability to drive has to be noted by the Driver and Vehicle Licensing Agency (DVLA)† . The DVLA website holds further information on driving and medical conditions which should clarify any other queries.

The more time you spend on the road the more likely you are to be involved in an accident. So if you tend to drive a lot your premium may be higher.

An insurance company will look at your occupation as an influencing factor on the price you pay. Certain occupations will be a higher risk, such as those that carry goods in their vehicle. Other occupations such as sportsmen and sportswomen, entertainers and chefs may also be seen as a higher risk.

Security systems on your van will also be a deciding factor on the premium you pay for your insurance policy. If your van is fitted with an alarm and/or an immobiliser it is less likely to be stolen, therefore you can expect to pay less for your van insurance policy.

Vehicle use
What you use your van for will have an effect on your insurance premium. The minimum risk would be if you only use it for driving between family and friends and to go shopping. However if you do use your van for both social and business purposes, you will face a higher rate from the insurance company, as you will be considered a greater risk due to the extra mileage you may do or the goods you may carry.

The different categories of vehicle use are:

Social, domestic and pleasure - you are covered for day to day driving, such as going to visit family and friends or shopping. However it does not allow you to drive to work.
Social, domestic, pleasure and commuting - you are covered as above but also for driving to a fixed place of work.
Business use - you can use your vehicle in connection with your job, such as driving to more than one place of work.
Commercial travelling - you can use your vehicle for things like door to door sales.
Remember! Tell your insurance company exactly what you are using your van for; otherwise you may not be covered if you need to make a claim. Your policy documentation will state what vehicle use you are covered for.

Your address
Where you live is another factor that is important to an insurance company when it comes to calculating your price. If you live in a city you can expect much higher levels of traffic than in the countryside which will mean that there is a greater risk of having an accident, therefore this will make you a higher risk as there is a greater chance that your van will be involved in an accident, vandalised or be stolen.

If you leave your van out on the road overnight rather than locked in a garage this may also affect the amount the insurance company charges.

Remember! You must tell your insurance company if you move, even if this is temporarily such as when if you are studying away at university.

Our top tips for cheaper van insurance

Shop around for the best quote
Many people renew their van insurance with the same insurance company every year and so may pay more than if they shopped around and compared quotes. One of the easiest ways to see what is available is to use a comparison website, such as You only have to enter your details once and we will provide you with quotes from leading van insurance companies.

Remember! The cheapest policy is not always the best; there may be essential pieces of cover not included.

The size of your van
Make sure you own a van that is suitable for your needs, don't buy a transit van if you are not going to transporting lots of goods. It is often the case that smaller vans cost less to insure.

Prove your bonus
If you have a no claims bonus make sure you can prove it, as this can help to reduce your premium as you will be viewed as a lower risk. If you do not have a no claims bonus as this is a new van insurance policy, some companies will mirror a no claims bonus from another vehicle or use a letter from your company proving your driving experience.

Ensure your van is parked in a secure place, such as a garage. Also get an alarm and immobiliser fitted to your vehicle as these will deter thieves, meaning that you will be classed as a lower risk.

Pay annually rather than monthly
If you can afford to pay for your van insurance in full, then to save money it would be advisable to pay in full. This is as some insurance companies will add interest to your monthly repayments resulting in the total amount that you pay them being higher.

Don't pay for cover you don't need
Minimise your optional extras, only have the ones you need as this will increase your premium. Make sure you check what is included in your policy as sometimes insurance companies may add these optional extras to your policy without you even asking.

Increase your voluntary excess
If you increase the amount your voluntary excess is, this can reduce your premium. However remember that this will be in addition to the compulsory excess amount, and if you were to have an accident you would be expected to pay up the total amount of both excesses.

Limit your mileage
Make sure that you put down the correct mileage, make sure that you are not putting down too many miles.
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