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Costs of Pay-as-you-go Van Cover

Pay-as-you-go van cover has two main costs: the premium and excess. The premium is the monthly payment for the cover. The excess is the amount that the motorist must pay on a claim before the insurer will begin to pay. These two amounts are inversely related; the higher the excess, the lower the premium, within certain limits.

Excess

Motorists must pay a certain amount for every claim before the insurer will begin paying their share. This cuts down on the cost of claims to insurers and serves as a disincentive for motorists who may otherwise put in many small claims. The total excess is comprised of the voluntary and compulsory excesses. The compulsory excess is determined by the insurer and cannot be changed. The voluntary excess is set by the policyholder and may be anywhere from 0 to 1000. It can be changed at the beginning of a policy or at renewal. Choosing a higher excess will lower one's monthly premium. A higher excess makes it less likely that the insurer will have to pay out a claim; it's less risky to insure that motorist, so insurers offer them a lower premium.

Factors Affecting Premiums

Insurers account for many variables when determining premiums. They consider everything from driving history, age, vehicle, level of cover, occupation, and mileage, among many others. The two most important are driving history and age. Driving history is paramount. Insurers take into account convictions, offences, points on one's licence, and so on. The more offences one has, the higher will be the premium. If one has too many, the insurer may decline to offer cover. Age is the other important factor. Young drivers are especially risky. Whilst young drivers can purchase pay-as-you-go van insurance, employers using such cover for business purposes might be better served choosing the "Named Drivers and Any Driver 21 or Over" option. Adding named drivers to the policy will impact the premium. If the policyholder adds a young male driver, premiums will likely increase significantly. Gender does affect the premium; women are statistically safer drivers and thus pay lower premiums. Numerous other factors also contribute.

Other Costs

There may also be other costs associated with pay-as-you-go van cover. There is a monthly administrative charge of 5. If a motorist has comprehensive cover and gets into an accident, there may be excesses associated with replacing audio equipment or the windscreen and windows. Motorists must also pay an excess for an accident wherein a young or inexperienced driver was driving the van from 150 to 350, depending on the driver's age or inexperience. There are many of these types of fees and excesses that are not immediately apparent without reading one's policy documents, so motorists should read them with care.

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*PLEASE NOTE: All details above are based on a typical policy and conditions will change from time to time, and from one insurer to another so please check policies carefully before entering into any commitments.
 

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