Home Business Insights & Advice Everything you need to know about van insurance

Everything you need to know about van insurance

by John Saunders
4th Jan 22 2:54 pm

A van insurance policy provides you financial coverage if your van is damaged, stolen, or vandalized. It also covers the costs if you accidentally injure someone else with your van or damage someone else’s property. If you use a van for commercial purposes, you should buy van insurance to prevent spending from your pocket if any of the above-mentioned incidents take place.

Types of van insurance

You should buy van insurance depending on your budget to pay premiums and the expected coverage amount. Here are three types of van insurance that you may choose from:

  • Fully comprehensive – A fully comprehensive policy covers four things: coverage against theft and vandalism, medical coverage for you and your passengers if you become the victim of an accident, medical coverage for third parties if you are the offender in an accident, and damage repair coverage if you accidentally destroy someone else’s property with your van.
  • Third-party, fire, and theft – You may notice a few van insurance policies mentioning TPF&T in their terms and conditions. It refers to third-party, fire, and theft coverage for your van. However, it won’t cover other expenses, such as repair costs if your van is accidentally damaged by another car.
  • Third-party only – Popular known as TPO, this type of van insurance covers the medical treatment cost and damage repair expenses if your van injures someone or destroys someone’s property. Make sure you read and understand the terms and conditions of this policy carefully before buying because it doesn’t provide financial coverage for fire damage or accidental damage to your van. It will also not cover the expense to buy a new van if someone steals your existing one.

If you would like to know any further information in relation to van insurance, then you can learn more here.

Business, commercial, or private van insurance – which one you should buy?

Suppose you drive your van both for personal use and business purposes. Which insurance policy is right for you? Most insurance companies provide private van insurance policies only if you use the van for domestic and social driving. On the other hand, if you use it to carry tools and machines to your workplace, you may still have to buy a business van insurance policy. The following are the types of van insurance policies that you should keep in mind before buying one:

1. Business van insurance

There are four categories of business van insurance policies:

  • Class 1 – This is the most cost-effective policy. It provides coverage for driving to various places while working, such as customers and clients. However, it won’t cover door-to-door sales.
  • Class 2 – This is similar to Class 1, but it allows you to add your named driver. Go through the terms and conditions of the policy carefully as most insurance providers mention that the named driver has to be one of your colleagues.
  • Class 3 – It offers coverage for long-distance driving, making it a suitable policy if your business involves door-to-door sales. However, it only provides financial coverage if you deliver samples to your clients and customers. If you use your van to deliver merchandise, you will have to buy a commercial van insurance policy/
  • Class 4 – It provides coverage only if you carry commercial goods in your van. You must mention the type of goods you carry at the time of buying the insurance.

2. Commercial van insurance

If you use your van to deliver merchandise, tools for services, and long-distance deliveries, you will need commercial van insurance. The three classifications under this insurance are as follows:

  • Carrying essential tools – If you are a plumber, electrician, or builder, and need the van to carry business tools, you should buy commercial van insurance.
  • Carrying goods for hire – If you use your van to deliver someone else’s goods, commercial van insurance may help.
  • Haulage – It provides coverage for long-distance deliveries.

Factors influencing van insurance premiums

Three factors influence the premium amount of your van insurance policy

1. Condition of your van – Is your van brand-new? If yes, you may need to pay a small amount of premium because it’s still in good condition. The cost of premium starts increasing according to your van’s condition and age. An old van with a relatively low-spec engine will require a greater coverage amount, and hence you may need to pay a higher premium.

2. Your driving history – If you have a clean driving history with no claims bonus, the insurance company may provide significant coverage with a low premium amount. The more cases you have in your driving history, the more premium you may have to pay for van insurance.

3. Your personal information – Your occupation, age, and location of driving also contribute to your van insurance premium. For example, you may have to pay a higher premium amount if you live in a neighborhood known for its high crime rate.

You can buy van insurance for school vans, private vans, public vans, and commercial vans. Talk to the insurance provider regarding the type of policy suitable for your van.

Importance of van insurance for your business

The following are a few reasons why buying van insurance is beneficial for your business:

  • Provides financial coverage for unforeseen losses – What if a drunk driver smashes his car into your van and destroys its glass windows? You shouldn’t be the one paying from your pocket to repair the damages. If you have van insurance, you can claim the amount you spent to repair the windows from the insurance company.
  • Comply with local laws – According to the Motor Vehicle Law, all vans, irrespective of whether they are used for personal or commercial purposes, should have at least a third-party insurance policy. If you don’t have one and the police catch you, you may have to pay a hefty fine.
  • Provides protection to your passengers – A comprehensive policy ensures that you provide protection to your passengers in case your van meets with an accident.

Prevention is better than cure. When you have the option to provide financial coverage to your van, why not utilize it? You wouldn’t want to burn a hole in your pocket to repair the damages inflicted on your van by someone else. Therefore, avail of van insurance before any unforeseen incident happens.

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