Courier van insurance falls under the umbrella of commercial van insurance. This type of insurance is for drivers who make multiple delivery drops in a local area.
It is commonly known as “hire and reward” insurance. However, it can also include other multiple stop van courier services that are not hire and reward. An example of such services includes delivering leaflets.
Typical courier van insurance is used for food or package deliveries. However, high-risk items, such as hazardous goods, are not included. Heavy furniture removals for customers, for example, when moving house, are often not included. But, light furniture removal is typically accepted.
Haulage insurance is a different type of insurance that may suit the needs of some van drivers better. This type of insurance is for long-distance drivers with only one or two delivery drops. Some potential courier drivers may wonder if specific courier insurance is necessary. Let’s find out more about when and why you may need courier van insurance.
Do I need courier van insurance?
Absolutely. If you use a van to transport goods not belonging to you, especially in return for payment, it is a legal requirement. Standard car insurance does not cover courier work.
The penalties for driving without insurance are severe. If you are stopped by the police or do not have the appropriate insurance during a collision, you will be penalised and given a conviction for driving without insurance. This will severely increase the price of, or severely limit your ability to get insured in the future.
Worse still, you could end up with six penalty points on your license and a £300 fine. You could also have your vehicle confiscated or be banned from driving for up to 28 days.
The level of courier van insurance needed depends on factors such as the type of goods you carry and how the van is used. Cars can also be used as courier vehicles, but a separate hire and reward use “Courier Car Insurance” should be obtained.
What level of van insurance do I need for courier work?
As with standard car insurance, there are three levels of cover available. These are:
- Comprehensive – This is the premium (most inclusive) insurance of the three. Fire, theft, and all vehicles involved in a crash are covered – even if you are at fault.
- Third-party, fire and theft (TPFT) – This covers damage to third parties, including injury and property damage. It also covers fire damage and theft of your van.
- Third-party only (TPO) – This type of insurance is the minimum legal requirement. This basic level only covers injury and damage to other drivers. It is often taken for granted that this is the cheapest option, but this is not always the case.
How much does courier insurance cost?
Firstly, courier insurance will generally cost less than haulage insurance. However, it is more expensive than social or carriage-of-own-goods cover. This is because an insurance provider will need to factor in the extra risk of you carrying other people’s goods – especially in built-up areas.
Optional extras and add ons can greatly increase costs. This means that it is important to weigh up the risk versus reward, and decide which optional extras and add-ons are essential, and which you don’t need.
Optional extras and add ons
Goods in transit cover
An optional extra, not covered as standard, is Goods in transit cover. Choosing this will cost you extra. It will be based on how much you have agreed the goods you are carrying would cost to replace in the event of theft or damage.
Goods in transit cover is a sensible option to consider as you will be carrying other people’s property. This policy will protect your cargo if it is lost, stolen, or damaged.
However, damage will only be covered if a package is damaged in transit. If a parcel has been badly packaged or the goods are poorly manufactured, this cover will not apply.
Some policies will also include cover for goods left in the vehicle overnight. This level of coverage will also cost extra. Furthermore, some policies may cover the cost of delivery delay claims made against you.
The level of cover will differ between insurance providers. There are also maximum pay-out limitations per item or per cargo. Often there are exclusions for fine art or jewellery, so make sure you read the small print.
It is also a wise move to consider breakdown insurance. A courier’s business relies on efficiency and a breakdown can severely impact delivery times.
Breakdown assistance can help the van get back on the road as quickly as possible, whether that be by paying for your van to be fixed on the roadside or towed to a garage.
Depending on the distance you are travelling, you may want to ensure you have nationwide coverage. However, many insurers include this as standard.
Legal expenses cover
This optional extra will cover your legal expenses if you wish to claim compensation for uninsured losses. This is included in an accident that is not your fault.
Examples of uninsured losses are loss of income, personal injury, or policy excesses. Basically, “uninsured losses” are any losses not covered by your courier van insurance policy.
If you also tow a trailer on the back of your van, it may be worth taking out extra trailer coverage. In some cases, this is offered as standard with third-party cover only.
Although, depending on the value of the trailer and the goods it carries, it may be worth getting additional coverage as an add-on.
Different insurance providers will offer different coverage. For example, a provider may cover third-party claims or damage to your trailer and its contents.
No-claims discount & no-claims protection
Some providers allow courier drivers to use their private vehicles no-claims discount. This will help reduce insurance costs, but it is rarely offered.
There is also an optional extra allowing you to keep your courier van insurance’s no-claims discount.
This is most definitely worth considering if you have a lengthy no-claims history, as protecting the discount may be far cheaper than paying the extra cost.
Protecting and/or adding your no-claims discount is a great way to keep costs down, but there are more.
How can I reduce courier van insurance costs?
- Trade Federations – Depending on which insurance provider you prefer, it may be worth joining a trade federation. This is because some insurance providers offer discounts to trade federations.
- Decrease size and power – If you are deciding on a new van or want to trade in your existing one, it may be worth getting a smaller, less powerful van. Smaller vans are less likely to be hit and less powerful vans are less likely to be driven at uncontrollable speeds. Insurance costs will reflect this.
- Black Box Policy – This choice is very much dependent on how safe a driver you believe you are. A black box uses either an app or a telematics device to collect data about how you drive. A safe driver, who obeys speed limits, will receive a reduction in cost. However, riskier drivers with a heavy foot may wish to opt out of this as it could also increase costs.
- Increase your voluntary excess – An individual may weigh up the risks versus rewards and choose to increase their voluntary excess. In the event of a crash or if you need to claim for any other reason, you will receive a lower payout. Or you may have to pay excess costs for damages, for example. But, if no claims are ever made, the reduced insurance costs will be worth it.
- Using a dashcam – The benefits of this are two-fold. First, in the event of a crash that is not your fault, you can prove it using dashcam footage. Secondly, insurance companies sometimes offer discounts to drivers with a dashcam.
- Use security features – Installing security features can help you get more competitive insurance premiums and help prevent theft. Older vans can have immobilisers fitted, as these were not standard before 1998. Often an immobiliser can be combined with an alarm system for extra protection. GPS trackers can help the van be located if stolen and can often shut off the van remotely. Extra lock protection, such as the installation of deadlocks, can also help prevent theft.
Can I get courier van insurance if I’m under 25?
Although it is possible, it can be trickier for young couriers to buy insurance. This is because of the increased risk of accidents from young and inexperienced drivers.
Some may offer insurance to drivers over the age of 21 but even fewer will offer it to those under that age. As to be expected, the price of insurance increases because of the exclusivity and risk.
Sadly, this means courier work is not always financially viable for your drivers.
The pandemic and Brexit have ushered in increased demand for courier work in the UK. With more people than ever shopping from home and many businesses running remotely, it is now one of the most in-demand professions.
With many considering this career path, it is essential to know the ins and outs of courier van insurance. Typically, this covers “hire and reward” deliveries, such as fast food and parcel delivery. However, it can also include other delivery services, such as delivering promotional leaflets.
Courier van insurance is needed for multiple drops rather than haulage insurance. Haulage insurance is typically for those who do only one or two drops over a long distance. Certain items are often not included in an insurance policy, including hazardous items or high-value packages.
Failure to get the correct insurance could lead to a fine, penalty points, vehicle seizure, loss of license, and, therefore, job loss.
Courier van insurance is pricier than private car insurance, especially for young drivers, who may find it is not a cost-effective career choice. A number of optional extras should be considered to achieve complete coverage, such as Goods in transit cover and breakdown assistance.
Courier drivers can implement a number of strategies to save money on their courier van insurance including using less powerful vehicles, buying a dashcam or installing a black box.
There you have it. Now you know the ins and outs of courier van insurance you can take the next step to ensure that your van is appropriately covered.