4 months ago

March 2018

Van Insurance MAKING

Van Insurance MAKING INROADS ON VAN INSURANCE: TOP TIPS Van insurance premiums reportedly hit a three-year high in 2017, so Total Contractor decided to take a look at some of the simple tips that might help contractors cut their insurance costs... In its October 2017 Van Insurance Index, Consumer Intelligence, an insurance market analyst, found that average premiums were at a three-year high of £1,214 after prices had risen 31.7% in the year to September. There are a number of reasons for this rise – an Insurance Premium Tax hike, a cut in the Ogden rate (which governs pay-outs for major personal injury claims), rising claims and fraud, the post-Brexit weak pound and the cost of repairing more technologically advanced vans. With this in mind, the natural question for most is how to cut insurance costs? “Look at the miles you drive because you should only pay for those driven, and the more you insure for, the higher the premium” 1. Don’t make a claim! The most obvious solution is to not make a claim and the more years of no claims bonus (NCB) acquired, the greater the discount applied to the insurance. Only claiming for catastrophic losses that you cannot afford to cover or protecting your NCB at extra cost are the only options. 2. Safety in numbers For those with more than one van, a thought might be fleet insurance; it’s easier to administrate and policyholders will benefit from the effect of multi-buy. 3. Appropriate action Next comes insuring vehicles appropriately. Anything other than third party fire and theft, or third-party cover is wasted on an old van, while clearly comprehensive insurance should be 78 TC MARCH 2018

taken for more valuable vehicles. Third party is the legal minimum but some form of commercial van insurance to cover either carriage of own goods (tools and materials between jobs), carriage of goods for hire or reward (for those delivering goods), or haulage (‘single’ deliveries over long distances) should be taken; always confirm if the contents are covered. 4. Added extras Consider also the optional extras. Do you need breakdown cover, legal expenses insurance, trailer insurance, courtesy van cover or overseas cover? 5. Mile markers Look at the miles you drive because you should only pay for those driven, and the more you insure for, the higher the premium. Be realistic – if there’s a claim, insurers can seek proof of mileage through servicing and MOT documents. 6. Excess baggage Also, be careful when setting the excess. The higher the excess, the lower the premium, but set it too high and you’ll never make a claim. Ensure that the policy and claims are affordable. You could also make drivers pay the excesses, but this requires them to agree to this beforehand or you risk a claim for unauthorised deductions from wages. 7. Training and gaining Is additional driver training an option to lower the odds that your insurer will have to pay out? If so, the key will be to find training that is provided by a firm approved of by your insurer. 8. Monitor your progress Look also at fitting trackers and on-board cameras; these devices effectively put drivers on notice that their activities are being monitored while providing defence backup in case of a claim. Also look at offering bonuses based on the driving record of employees. Vehicles are an essential tool of any contractor’s trade, but insurance can prove costly “The higher the excess, the lower the premium, but set it too high and you’ll never make a claim” 9. Size matters How big is your van? The larger the vehicle the greater the premium, so if you don’t need a large vehicle, trade it down for something smaller. Not only could it release capital, it’ll have a smaller engine and will be cheaper to run and may cost less to insure. 10. Parking practice And just as with your car at night, where you keep a van after hours will have a bearing on the premium. Garaged, on a drive or behind locked gates will lower the risk and therefore the premium. By the same token, keeping the van empty at night will help reduce the risk of a claim. At the same time, consider retro-fitting security devices such as an immobiliser, tracker, alarm, or stronger door locks which have been approved by insurers. 11. Modify your behaviour Lastly, vehicle modifications increase premiums so make sure you steer clear of those that boost performance or alter the aesthetics. That said, van wraps or logos appear to be cost neutral as they make a vehicle more readily identifiable and so perhaps less attractive to thieves. Also, insurers believe liveried van drivers to be more careful because they can be identified and complained about. Below we’ve listed a selection of useful online comparison sites: MARCH 2018 TC 79

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