Hire and reward insurance
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What is hire and reward insurance?
Hire and reward insurance is a type of cover that which allows you to legally carry passengers or other people’s goods in your vehicle in return for payment i.e. you ‘hire’ out your vehicle and receive a ‘reward’.
Therefore hire and reward insurance is essential for taxi and private hire drivers, couriers, chauffeurs or anyone else who uses their car, van or minibus to carry goods or passengers for payment.
Depending on the type of business you use your vehicle for, you could need specialist taxi insurance, courier insurance or haulage insurance. Different insurers have different definitions regarding the criteria of couriers and haulage drivers, so be sure to check your quotes thoroughly before choosing your policy.
There are a few things to be aware of when you are taking out courier or haulage insurance that could make a difference to your policy, such as:
- The type of vehicle – car, van, minibus, lorry etc…
- The distance you travel
- The amount of ‘drop-offs’ you make
Couriers are generally defined as making several drop-offs each day in the same area, whereas hauliers drive further to deliver a single load. Be aware though that some insurance companies have different definitions so make sure you read all the policy information before you buy.
Hire and reward van insurance
Given the benefits that come with hire and reward cover, it is most commonly associated with van insurance. Hire and reward van insurance is recommended for drivers who regularly use their van to transport people or goods over a short distance.
What does hire and reward cover?
Different insurance companies will offer different policy features for those who need a form of hire and reward insurance. Some of the more common cover options include:
Policies for single vehicles or fleets
Replacement vehicle for both Fault and Non-Fault claims
Cover for a variety of vehicles used for Hire and Reward, from purpose built Taxis, Minicabs through to Minibuses and Lorries
Home start and roadside repairs/breakdown cover
Public liability cover
Employers Liability cover
Goods in transit cover
Minimum EU cover
Drivers’ personal belongings cover
Cover for equipment (tarpaulin, ropes etc…)
Goods in transit insurance is essential for those who carry other people’s goods in their van, as it provides cover for the goods if they were to be damaged or stolen while in your possession.
Most hire and reward policies will allow you to choose the limit you want to insure goods for, but be aware that not all types of goods will be covered. For example, expensive items such as jewellery or artwork may be excluded under a standard policy so make sure you check that your cover is suitable.
Pay-as-you-go hire and reward insurance
Some insurance companies offer the option to take out hire and reward insurance on a pay-as-you-go basis. Designed to accommodate part-time couriers and delivery drivers, this type of short term insurance can often be paid on an hourly basis, meaning that you will never have to waste money on insurance that you do not need.
How much does hire and reward insurance cost?
The cost of hire and reward insurance will depend on a variety of factors that are specific to your business. These factors can include:
- How many vehicles you wish to insure
- How many named drivers there are
- The driver’s driving history
- What your vans are used for
- How frequently your vans are used
- Where the vans are parked at night
Hire and reward insurance will be more expensive than standard van insurance, as your work vans are likely to be driven on a regular basis - you also need cover for the passengers or goods you transport, which makes a hire and reward van insurance policy more expensive.
Some of the other major factors that will influence the cost of your premiums are:
Insurers will ask for your expected annual mileage, with those driving more miles over the year being seen as a higher risk of having accident, purely because they are on the road more.
Age of Driver(s)
Younger drivers tend to attract higher premiums as they are seen as statistically more likely to make a claim.
Cost of Vehicle
The vehicle’s value will be considered by the insurance company when calculating your premium, as this is how much they would have to pay out if it was to be written-off or stolen.
Insurers will look into your driving history to see what kind of experience you have. You may have not owned your own vehicle yet, or perhaps you’ve been renting a vehicle – most insurers will take this into consideration (providing you haven’t made any claims) and allow a discount for this.
No Claims Bonus
As with any kind of motor insurance, your insurer is likely to provide you with a discount if you can provide proof of a no claims bonus (NCB).
Insurers ask whether there have been any claims in the last 5 years, they will take this into account when pricing a policy.
Insurers ask whether there have been any claims in the last 5 years and will take this into account when pricing a policy.