Commercial Vs Private Van Insurance

Van insurance is something you don’t want to be caught without if disaster strikes. No one can predict the future but it’s better to be prepared for the worst than to be sorry.

Insurance is something most of us prefer to avoid but can you really afford to be inadequately covered if things go wrong? Most of us can’t and that’s why it’s important to make sure you have the right cover. But which type do you need? Commercial or Private?

If that’s your question too, this article is for you.

1. What Does It Cover?

Do you use your vehicle primarily for work purposes? Do you own a vehicle that was designed for commercial use? If so you may need a commercial insurance policy.

Commercial insurance policies will also cover you for personal use, but the reverse is not true. If you use your vehicle to transport products or goods to earn money, even if it’s part-time, you won’t be covered for loss or injury under your personal insurance policy.

Are you still unsure what type of cover you need? Best is to imagine scenarios of your travel. For example, if you’re a builder and you use your vehicle to transport equipment for your work and you travel from site to site, you will require commercial insurance. This is to cover the high risk of accidents & theft. If you only use your van to commute to work and back, then a personal policy is all you need.

If you’re still unsure discuss it with your insurance broker or agent. It may be possible to change your personal cover to include some work activities which will cost you less in monthly premiums.

2. Advantages / Disadvantages of Each

Commercial and personal van insurance come with different types of risks. The risk and involved in the insurance quotes are governed by various factors.

Risk: You’re likely to use your work vehicle far more than your personal vehicle which increases the chances of theft and accidents.

Drivers: If you have a business vehicle you may also have multiple drivers and the insurance will need to cover all of them.

–Wider area:If your business transports products it may do so across a wide area or even across the border into other countries. A commercial policy will cover your vehicles for all the areas they operate in.

“The advantage of a commercial cover is that you’ll be fully covered whether you’re using the vehicle for commercial or personal use. It’s also more comprehensive.

Personal van insurance doesn’t cover business owned vehicles or vehicles designed solely for business use. In some cases, if you use a commercial vehicle for personal use and you can provide a valid reason why you need it your insurance company will arrange a personal insurance policy.

Personal insurance may provide some cover for business use providing it’s not used primarily for business. This will need to be discussed with your insurance broker or agent who will individually assess your situation and decide which policy is best suited to your needs.

If you earn money from the use of your vehicle in any way, then you need commercial insurance. You may only need your business activities included in your personal policy but it’s best to clarify and be sure that you’re fully covered for any eventuality.

3. Issues Surrounding No Claims Bonus (NCB)

You should always flag with your insurance provider the possibility that you might want to move from using the van for commercial use to private use only.

Issues around switching between commercial and private use often arise when a policyholder surrenders their no claims bonus (NCB) from their private policy, to a commercial policy held in the name of their business.  Clients often want to do this to save money, because taking out a commercial policy without any NCB is very expensive.

The difficulty, however, lies in moving a company-linked NCB back into a private individual’s name. Therefore we would recommend that, if you think you will at some future stage require your NCB back in your private name, you should avoid using it with your company name.

_______________________

Ask The Expert – Van Insurance For A Start Up Business

Q: I’m thinking of getting a van to use for my start-up, but I’ve been reading up on commercial insurance and there’s a few things I’m not clear about. It seems that you can get commercial cover only if your occupation is among a set list of trades – is that correct? If you’re not on that list, what do you do? Also, it seems that some people who initially covered their van commercially but subsequently wanted to just have it for private use had trouble getting private insurance for it. I’m now a bit puzzled about the whole “commercial versus private” thing, and would prefer to know about all this before I go down this road.

A: The best thing to do is consult an expert who can provide you with a quote, and ask them about the wording you use for your occupation and how this will affect your premium. It may be the case that a simple change of description could reduce the costs quoted to you. For example, a person using their van for deliveries every day will pay a substantially higher premium than someone who parks their vehicle all day on the site where they are working.

There isn’t a specific occupation list. We can quote most occupations through tradespeople – builders, plumbers, carpenters and their like – are the target market.

You may find it easier to get a competitive quote through a broker rather than a direct-line insurer, as brokers have access to a much wider market and will therefore be able to provide you with more options.

You should also flag with them the possibility that you might want to move from using the van for commercial use to private use only. Issues around switching between commercial and private use often arise when a policyholder surrenders their no claims bonus (NCB) from their private policy, to a commercial policy held in the name of their business – in this case it would be your start-up company’s name. Clients often want to do this to save money, because taking out a commercial policy without any NCB is very expensive.

The difficulty, however, lies in moving a company-linked NCB back into a private individual’s name. Therefore we would recommend that, if you think you will at some future stage require your NCB back in your private name, you should avoid using it with your company name.

You can set up a commercial policy for a start-up in your private name. The vehicle will be registered in your own name and not the start-up, but you would still be using the vehicle for work. Then if you ever wanted to insure a private vehicle in the future, you would still have a NCB in your name that you could use.

Source : The Sunday Times

______________________

Do you have more questions? We’ll be happy to answer them; call us today on 01 660 6900 or visit our quote request page to get started with your commercial van insurance quote. For inquiries regarding passenger vehicles, try Coverinaclick.ie for some of the best car insurance in Ireland.