Why is van insurance so expensive?
22/07/2021
From sorting out your servicing and MOT, to arranging the right insurance policy and filling up the fuel tank, owning a van can be an expensive business. But why does it cost more to insure a van than you’d pay for car insurance?
Research by the data analytics company, Consumer Intelligence, found that the average van insurance premium in the UK came in at £1,781, versus an average of £820 for a car.
But exactly why is van insurance so expensive?
Well, vans typically have more powerful engines than cars, and commercial vans in particular usually spend more time on the road. From an insurance point of view, both of these factors increase the risk of an accident happening and a claim being made – which is reflected in the premium.
But it’s not just engine size that affects your premium. Let’s take a look at some of the other reasons why van insurance can often cost more, and whether or not there’s anything you can do about it.
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How van insurance groups affect your premium
Just like cars, your van’s insurance group can have a major impact on the cost of your van policy. Groups are based on features like engine size, cost of parts, the weight of the vehicle, its security features and its performance.
There used to be 20 van insurance groups, with group one being the cheapest van to insure and group twenty being the most expensive. So, for example, a 2008 Citroen Berlingo in group 1E is one of the most economical small vans to insure, whereas a Mercedes Sprinter with greater payload could be as high as group 18 out of 20.
If you’re looking at buying a brand new van, though (or a used van that’s only a year or two old), it’s worth bearing in mind that van insurance groups were updated back in 2016 so there are now 30 groups rather than 20.
Vans made before the changes were introduced will still be classed using the original system from group 1 to group 20. Vans manufactured after 2016, though, are categorised into groups that range from 21 through to 50, with group 21 being the lowest (attracting cheaper premiums).
But whether you buy a new van that’s categorised using the new van insurance groups, or a used van that is grouped into the older van insurance groups, if you double-check whether the insurance group the van falls into before you buy the vehicle you could save yourself money on your premium in the long run.
How does van insurance class of use affect my premium?
Vans that are used for business generally cost more to insure than private use vans. One of the reasons for that is that commercial vans usually spend more time on the roads and clock up more miles than your typical car, two factors that can significantly increase the risk of the vehicle being involved in an accident at some stage.
In addition, commercial vans sometimes need additional add-ons and policy features that you wouldn’t usually find on a car insurance policy, which again can push the premium up.
For example, if you’re a courier you’ll need a van insurance policy that includes goods in transit insurance. This type of add-on insures you for ‘carriage of goods for hire and reward’, and will typically cost more than a policy that covers ‘carriage of own goods’ (which you’d need if you were transporting your own tools).
Will signwriting or branding on my van increase or reduce the cost of my insurance?
The answer to this isn’t clear-cut. Some insurers consider signwriting and vehicle wraps to be a modification, and just as with cars modifying your van can lead to higher premiums.
On the other hand, some insurers view branding on your van in a more positive light, and there are a few who may even lower your premium because there’s an assumption that you’ll drive more carefully if your van advertises your business. Having a van that’s easily identifiable is also a good deterrent to opportunistic thieves, which some insurers may also reward.
Given the fact that there’s no straightforward answer to this question, though, it would be a good idea to check with your own van insurance provider before you invest in a full vehicle wrap.
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Do ‘how’s my driving’ stickers actually help cut the cost of cover?
Again, this depends – while it shows you’re serious about safe driving, any discount will be at the discretion of the insurer. However, research suggests that van drivers with these stickers are involved in 22% fewer road traffic accidents, so there are a few insurance providers that do take them into account.
Can you use car no claims on van insurance?
You can – but bear in mind that in most cases, your no-claims discount can only be applied to one vehicle at a time. For instance, if you’re switching from a car to a van you should be able to transfer the discount from your car to your van policy, but you can’t apply the discount to both the car and the van.
A handful of insurers offer a mirrored NCD, which is where you can apply the discount to another vehicle. If this is offered, strict conditions usually apply – for example you might have to be over a certain age or have been driving for a set number of years.
Top tips for cutting the cost of van cover
While it’s vital to have a policy that meets all your needs, you can help lower your premium by:
- Paying for your policy on an annual basis
- Installing additional security features (eg an alarm or engine immobiliser)
- Parking your van in a garage or on a driveway
- Increasing your voluntary excess (although it’s important to bear in mind that this does mean you’ll have to shoulder a larger proportion of the expense yourself if you have to claim on your insurance).
Of course, the best way to ensure your van insurance is a little less expensive is to compare van insurance quotes from a wide range of providers, which will almost always help you find a cheaper price than your renewal quote.
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This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.