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What type of van insurance do I need?

If you’re a first-time van owner, you’ll need to make sure you choose the right class of use when it comes to sorting out your van insurance. Not having suitable cover can result in an unlimited fine and up to eight penalty points being added to your licence.

18.07.25

By Alan Boswell Group

different types of vans

To ensure you don’t get caught out, here’s how to decide what policy’s right for you. 

What are the different types of van insurance? 

‘Class of use’ is a term that describes the way you use your vehicle. Although most policies can be tailored to suit you, there are four main options to choose from: 

Social, domestic and pleasure (SDP) 

This means you only use your van for personal reasons, for example, running errands, doing the school run, or using your van on holiday. 

SDP plus commuting 

As well as using your van for personal and social reasons, this also means you can drive it to work (typically, this is limited to just one place of work). If you’re commuting to different premises or sites, it’s worth mentioning to your insurer, who will ensure your policy reflects that.  

Carriage of own goods (business use) 

This covers you to carry your own tools or equipment in your van as you travel from job to job. Carriage of own goods is one of the main types of van insurance used by self-employed tradespeople or sole traders. 

Carriage of goods for hire and reward  

These policies cover you to carry other people’s goods in exchange for payment. If you’re a courier delivering parcels, this is likely the type of van insurance best suited to you. 

What’s the difference between commercial and personal van insurance? 

Commercial van cover is aimed at anyone who uses their van for business purposes, for example: 

  • delivering parcels if you’re a courier; 

  • carrying your own tools from job to job if you’re a tradesperson. 

Two of the main types of business van insurance are carriage of own goods and carriage of goods for hire and reward. 

If you only use your van for domestic reasons (SDP or SDP plus commuting to a single workplace), then these activities will be covered by personal van insurance.  

What happens if I choose the wrong class of use? 

Having the wrong class of use means you don’t have the right cover for your needs, which invalidates any policy you have. This essentially means you’re driving without insurance.  

In the UK, uninsured driving is considered a ‘strict liability offence’; so having the wrong insurance is the same as having no insurance. It doesn’t matter that your lack of cover is unintentional – you’ll still face the same penalties (an unlimited fine and up to eight penalty points). 

What levels of van cover are there? 

As well as class of use, you’ll need to choose the level of cover you want: 

  • Third-party only – this compensates other people (third parties) for damage or injury you cause in an accident; it doesn’t cover your van for damage.  

  • Third-party, fire, and theft – as well as third-party cover - these policies will also compensate you if your van is stolen or damaged by fire.  

  • Comprehensive cover – this includes third-party, fire and theft and will also cover your van if it’s damaged in an accident.  

What extra van insurance add-ons are there? 

Insurers will also give you the chance to add on optional extras. These can help increase your overall protection and cover you for more activities or events. Extras to consider include: 

Goods in transit  

Goods in transit insurance covers other people’s items in your van and will compensate you if they’re lost, damaged or stolen.  

It’s worth bearing in mind that although they sound similar, goods in transit is not the same as carriage of goods for hire and reward. Hire and reward insurance only insures you to drive your van whilst you’re transporting items for delivery.  

Goods in transit insures the actual items that you’re carrying; for example, if you’re delivering parcels and someone steals something, goods in transit insurance covers the cost of the stolen item. 

Tools in transit 

These policies protect your own tools in transit, so you’ll be compensated for the loss, damage or theft of your belongings.  

Most policies with tools in transit cover will have certain conditions that you’ll need to meet. Often, this means you can’t store tools in your van overnight, or if you can, you might be expected to have a specific type of lock.   

Breakdown cover 

If you’re worried about breaking down at the side of the road, then adding this can give you reassurance that you won’t be left stranded. 

Most providers will offer you a choice of breakdown cover, allowing you to select the level that suits you best or fits your budget. For example, roadside assistance means a mechanic will try to fix your van there and then. If they can’t, your van will be towed to the nearest garage.  

The next level up from roadside assistance is national recovery, where your van is towed to a garage of your choice. Onward travel is another option to consider, which will cover the cost of alternative transport (such as a hire van). 

Public liability insurance 

Public liability insurance covers you if a member of the public blames you for damage or injury in relation to your business. For example, if someone walks into your van door as you’re opening it, or if you’ve got an electric van and someone trips over its charging cable.  

You don’t need public liability insurance by law, but if you’re running a business, it’s strongly recommended. In some cases, it might also be essential if you want to work with public services, such as local authorities, schools, and hospitals. 

What factors affect the cost of van insurance?  

As with car insurance, several factors influence the cost of van insurance, as providers assess the risk of you being involved in an accident. Points that insurers consider include: 

  • The van you drive – larger, more powerful and expensive vans cost more to insure because the potential for damage is greater, and it’s likely to cost more to fix. You can gauge how expensive insurance might be by checking a van’s insurance group rating; lower ratings generally mean lower premiums.   

  • Your age – young drivers pay more than the average for insurance because, statistically, they’re at greater risk of being in an accident. So, if you (or your employees) are under 25, this will be reflected in a higher premium.  

  • Your driving experience – regardless of age, if you’ve only recently passed your test, there’s a good chance you’ll pay slightly more compared to experienced drivers. 

  • Your driving history – claims within the last five years, driving convictions, and penalty points mean you’ll pay higher premiums. Your choice of insurer may also be limited.  

  • Mileage – the more miles you drive, the greater the chance of being involved in an accident, which is reflected in a higher premium. While it’s not always possible to reduce your mileage, being as accurate as possible can help prevent you from paying more than you need.  

  • Security features – you can keep premiums down by making it harder to break into or steal your van. For example, keeping it in a garage or investing in an immobiliser.  

  • Where you live – premiums can be higher if you live somewhere with a higher-than-average crime rate.  

Van insurance for peace of mind

Van insurance must reflect the way you use your vehicle – whether that’s purely for personal reasons or work. Not having the right cover doesn’t just invalidate any policy you have; it can result in fines and penalty points, which stay on your licence for four years. This can also make insurance more expensive when you come to renew. 

At Alan Boswell Group, we offer simple, flexible van insurance tailored to suit you.

Speak to us:  01603 649700

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