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Leasing a van with insurance - a complete guide

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by Claire Evans | 17/05/2019

It's important to get the right type of insurance for the job when you're leasing a commercial. Here's what you need to know about lease van insurance...

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If you're leasing a van, you'll need to make sure it's properly insured. Some van leasing contracts include insurance, making it one less thing to worry about, but if it doesn't you'll need to arrange your own.

There are many different types of van insurance, and what you need can vary dramatically depending on how the vehicle will be used.

As with any form of insurance, it's important to be clear with your provider about precisely what you will use your van for to make sure you end up with the right policy. Given all the different types of van insurance, the jargon and the multitude of uses for a commercial vehicle, it's vital that you're crystal clear from the outset, because you don't want to find out that you're not covered later on.

Our guide explains the ins and outs of van insurance, as well as the various forms it can take, so you'll know precisely what you need for your business.

Do I need van insurance?

Every vehicle that drives on UK roads is legally required to have insurance, and vans are no exception. The minimum level of cover is third party, which covers damage to other people, vehicles, animals or property, but doesn't cover damage to your own vehicle.

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What insurance cover do I need for my leased van?

Most van leasing contracts will insist that you take out fully comprehensive insurance cover for your van. That's because you'll be responsible for the safe return of the vehicle at the end of the lease deal, and the leasing company will want reassurance that any damage will be put right. It's just as important that the van will be covered should it be stolen or written-off.

Most van owners use their vehicles for work, so it's important to make sure the policy includes business use, unless you intend to drive it purely for personal reasons. And as with car insurance, you'll need to make sure anyone who drives the van is properly covered.

More specialist forms of cover are also available, which you may need if you plan to use your van for a specific purpose, such as to carry tools or to deliver parcels. We explain these in more detail below.

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What does fully comprehensive insurance cover a lease van for?

As the name suggests, this is the most complete form of cover available for a conventional van insurance policy. It includes cover should the van be stolen or written off by a third party, as damage to your own vehicle and personal injuries, even if the accident was your fault. It often includes windscreen repair and a courtesy vehicle if yours is being repaired, although that can vary depending on the insurance company.

Commercial vehicle insurance for lease vans

You must have commercial vehicle or business insurance if you are going to use your van for work, because a private policy (the type you'd get for a car that is just used for personal trips) will not cover you for commercial activities.

The exact type of insurance you require will vary depending on the type of work you do, and we've explained the different types below. It's worth noting that insurers usually consider commuting to be business use when it comes to vans, so you'll probably need a commercial policy even if you just drive it to and from work.

Carriage of own goods insurance

This type of insurance is designed for drivers who transport tools or equipment for work, such as a plumber or a carpenter. It also covers anyone who commutes in a van or drives it for other business purposes, such as travelling to meetings.

It's important to check whether or not the policy will cover the tools or equipment in your van if they're damaged or stolen, because insurers may or may not include such cover as standard, especially if the equipment is particularly valuable. Make sure you know exactly what you're getting.

What is courier and hire or reward insurance?

Carriage of goods for hire or reward insurance is designed for couriers or delivery drivers who make multiple journeys and deliver packages or products to different locations.

Some policies will include a certain level of cover for the products inside the van (known as goods-in-transit insurance), but others may not. Check with your provider to understand precisely what's what.

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Haulage insurance

This applies to drivers who deliver goods to a single destination, for example, those who use their van for removal services. It's similar to hire and reward (some insurers may even group the two together) but it is distinct in that it does not apply to anyone who makes multiple, courier-style stops.

Fleet insurance

Fleet insurance policies are designed for companies with multiple vehicles. The policy will cover certain members of staff to drive vans for specific business reasons, such as deliveries or to transport equipment or materials to a site.

It's common to find fleet insurance policies, and even some private/individual ones, linked to telematics systems (black-box-style equipment that monitors vehicle locations and the drivers' driving styles, among other elements) which can help to make the fleet cheaper to run, safer, and lower the cost of premiums.

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