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The importance of van insurance and where you park

Many drivers think of van insurance as an expensive hassle – so here we look at why it’s important, where to get competitive quotes and the role parking can play in reducing premiums.

Why do you need van insurance?

Though the number of road accidents in the UK has been falling in recent years, the casualty rate remains high. According to Department of Transport figures published in June 2009, the number of people killed in road accidents in the UK in 2008 was 2,538; with 28,572 people killed or seriously injured.

If you are involved in an accident and injure a third party then you could be held responsible for their medical care and any damage to their property if you are deemed to be at fault. This is where van insurance comes in – as it can cover the costs of any claim made against you.

There are three types of van insurance available in the UK:

  • Third party only: Covers you against liability for injuries to others; damage to property; and liability while towing a caravan or trailer.
  • Third party, fire and theft: Includes everything in third party cover plus fire damage, theft of your own vehicle and damage caused to your van during theft.
  • Comprehensive cover: Covers everything in third party, fire and theft and usually adds cover for loss or damage to your vehicle; personal effects; medical expenses; accidental damage; and windscreen cover. Bear in mind that levels of cover vary depending on the policy you take out.

In addition, depending on the policy you choose, there may be a number of optional extras available for an added premium. These could include legal protection, breakdown cover, insurance while driving abroad, courtesy van cover and personal accident cover.

How much does van insurance cost?

How much you pay for van insurance is dictated by how insurers assess the risk of you making a claim – the more likely you are deemed to make a claim, the higher your premiums will be. This can be influenced by a number of factors including:

  • Claims history: Have you made a claim on your insurance in the last five years?
  • Driving record: Do you, or any of the named drivers on your policy, have any driving convictions in the last three-five years?
  • Mileage: Clearly the more time you spend on the road, the higher your premiums are likely to be.
  • Personal circumstances: Does your job dictate that you spend a lot of time on the road? Are you married – married van drivers are generally deemed more responsible. Do you have any medical conditions that may affect your driving?
  • Van insurance group: Use the Association of British Insurers’ database to see how your van is classified – the lower the group rating, the lower your premiums should be. Factors taken into account include the value of the vehicle, replacement/repair costs, performance, and whether or not it has a security system in place.
  • Your address: Do you live in a high traffic area or a region with a high rate of vehicle crime?

Importantly, insurers often evaluate these risks in different ways meaning there can be significant gulfs between the quotes you receive from one insurer compared to another. To illustrate the point we ran quotes for a 27-year-old self-employed male plumber from Merseyside who owns a 2005 Ford Courier 50 for carriage of his own goods with five years’ no-claims and a £250 excess. The cheapest quote this driver received through a leading comparison website that compares deals from 31 insurers was £373.54 a year. However, the same driver was also quoted £727.88 by a different insurer – a difference of more than £350. This emphasises the importance of shopping around to ensure you’re receiving value for money.

How does parking influence premiums?

Where you park your van can significantly impact your insurance premiums. Insurers take into account where you park during the day and especially at night – storing your van in a garage overnight and therefore out of the sight of opportunist thieves could significantly reduce your premiums.

For example, by parking in a locked garage overnight, the male van driver discussed above found a cheapest quote of £373.54 a year. However, if the same driver parked on the road at home overnight his cheapest premium would rise to £403.52 from the same insurer – a difference of around £30 a year. Yet by parking in a secure car park the original quote would remain intact.

So the message is to think carefully about where you park as there could be significant financial benefits. Make full use of a garage, if you have one available, and, if not then use a secure car park to ensure you keep your van as safe as possible and to lower your van insurance premiums.