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.
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
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.
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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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
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