If you are looking for a new van insurance policy, comparing the excess can help to reduce any future claim’s costs. So, how does van insurance excess work, what is the difference between compulsory and voluntary excess and how does this affect the cost of your insurance policy?
What is Van Insurance Excess?
Putting it simply, the excess is the amount of money you will need to pay should you make a claim on your van or van fleet insurance. This will be discussed and agreed before the policy is signed, and the policyholder should only be liable for the excess if they were at fault for any damage caused to the vehicle.
As an example of how excess works, if you were to claim £800 worth of damages and your excess was £300, you would be requested to pay £300 of the costs and your insurance provider will cover the remaining balance.
If you are involved in an accident that isn’t your fault, you will probably still need to initially pay the excess for the damages caused to your van. It is possible to recover the excess from the person responsible by adding cover for legal expenses and/or uninsured loss recovery to your policy. It is worthwhile discussing these options with your motor trade insurance broker before committing to a new policy.
The Two Types of Insurance Excess
When looking at the details of a van insurance policy, you will come across two terms for the excess: compulsory (or mandatory) and voluntary.
Compulsory excess is the amount set by the insurance company that a policyholder has to pay in the event of a claim. The amount set is likely to be higher for a younger driver or someone with little experience, and a vehicle of greater value that will incur costlier repairs.
Voluntary excess is the optional amount added on top of the compulsory excess that you can choose to pay towards any claims you may make. The higher the level of voluntary excess, the more reduced your annual van insurance premium expenses are likely to be. If you are just setting up in business, this may be a way to reduce the costs of your policy, but it will also mean a larger pay out in the event of an accident.
Young Driver’s Excess
If you are looking for van fleet insurance and have trainees or have added a younger more inexperienced driver to your team, you will probably see young driver’s excess pop up on your policy. This means you are liable to pay a higher compulsory excess as younger drivers are considered a higher risk for accidents, particularly if the job involves regular driving.
Should You Increase Your Voluntary Excess?
It’s always difficult to know the best option when thinking about your voluntary excess. Discuss this fully with your insurance broker as they will be able to look at the best-case scenario for your business. If you are an experienced driver with a safe driving record, it may be worthwhile increasing your voluntary excess, then putting aside the money just in case.
If you are thinking of making a claim following a minor accident, you may want to weigh up whether it is worthwhile. The excess could work out more expensive than the cost of the repair, especially if you have contacts within the industry who can fix your van at cost. It may also affect an unprotected no claims bonus and you could be considered a higher risk, so your compulsory excess will be increased when you come to renew your policy.
Whether you decide to make a claim or not, it will be a condition of your van insurance policy to let your broker know about the incident within a reasonable timeframe so they can also offer advice on the best course of action you should take.