If you run your own business and use a van as part of your day-to-day work, you will have noticed that your insurance premiums have been creeping up over the past few months. Insurance account executive Jason Harden suggests some of the reasons why this is happening:
- The value of insurance claims has been going up as all vehicles – including vans – have become more high-tech, which require specialist repair services.
- Many of the most popular makes and models are manufactured overseas, which means that spare parts cost more to import.
- Van drivers who have an accident will often need to make bigger claims, as it’s not just damage to the van that they need compensation for – they often need to claim on the cost of lost business while their van is out of action, and possibly for damaged equipment and tools.
- The government’s Ogden Discount Rate has recently been reset at -0.25%. This rate is used to help calculate compensation payments for victims of car or industrial accidents, and the new rate means that motor insurance premiums will need to rise, with younger drivers - who are always classified as high risk - seeing the biggest hike in their premiums.
What can a commercial van driver do to reduce this figure? A good start is to make sure you give clear and precise answers to questions from your insurance broker, such as what your vehicle is being used for, and its replacement value. These will have a significant bearing on your premium.
Before you pay your next renewal premium, these top ten tips could help you save money.
1. Build up your no-claims bonus
For every year you go without making a claim, you’ll build up your no-claims bonus and the higher your ‘safe driver’ rating will be with your insurer. Some insurers offer the opportunity to mirror your no-claims bonus from your car insurance policy. However, not all insurers do this, so make sure you let your broker know if you have any no-claims bonus so they can check.
2. Increase your voluntary excess
Your excess is the amount of money that an insurer deducts from any pay-out before it is paid to you. The excess can be tweaked so that the higher the excess, the lower your premiums tend to be. But remember that this means any future claims you make are likely have a lower pay-out as a result.
3. Make your van more secure
It’s common sense: the more secure you make your van, the less likely it is to be stolen. Make sure your vehicle is fitted with an immobiliser, alarm and tracker. This could in turn lower your insurance prices.
4. Advertise your business on the van
Getting your business name and contact details on the side of the van makes it easier to identify and therefore less likely to be stolen. And of course it may bring in new business at the same time! If you declare to your broker/insurer that you have van signage it could help to lower your costs. Remember at the same time to make sure that your insurer includes cover for replacement sign writing in the event of a loss.
5. Place your van insurance with a broker or insurer you already use for your car
Most insurers will offer a discount if more than one insurance policy is placed with them. If you don’t ask you don’t get!
6. Be as accurate as you can about van mileage
The further you drive the higher your insurance premium will be, as statistically, the more you use your van, the greater the likelihood of making a claim. This doesn’t mean that you should underestimate your mileage in order to get a cheaper price. But you could be unknowingly overestimating it and paying more than you should.
7. Be realistic about the value of your vehicle
You may be tempted to think that if you suggest your van is worth more than it is, then insurers will pay you that amount in the event of a total loss. This is not the case! Insurers will research the replacement value at the time of your claim, so if you inflate the value of your van you may well be also paying a higher premium.
8. More than one van or company vehicle?
If you have more than one vehicle in your company name, you may be eligible for a fleet policy, providing more flexibility and maybe even a saving. Speak to your broker for more information.
9. Do you have a van but don’t use it for business?
Although most people use their van for business use, over a third (34%) own a van but only use it for social purposes such as camping and helping friends and family. If you have a van but aren’t using it for business, then you may be able to lower your insurance premium.
10. Always be honest!
You may be tempted to tell the occasional white lie in order to shave some money off your premium. This is not a good idea! Your claim could be refused if it turns out you have lied on your policy and could even lead to your policy being cancelled.
You are required by law to insure your van, but you don’t have to pay over the odds for it. Remember - having the right level of insurance is more important than the price so never compromise on cover for the sake of a saving!