A combination of the pandemic, rising inflation, and the emergence of the gig economy has seen an increase in people choosing to become courier drivers. The role can be performed part-time as a side hustle, or full-time and can pay well depending on the circumstances.
London has the largest share of the courier market in the UK. Around 20% of all courier companies are in the capital. The UK has 15,695 courier firms and London has 3,101 of them.
There are of course downsides to becoming a courier as there are with lots of jobs. London traffic can cause problems with deliveries. There is also the risk of injury through lifting, and vehicle breakdowns to contend with.
And due to how many companies operate today, a lot of courier drivers are classed as self-employed, which means that they use their own van for deliveries, and must also pay for their own insurance.
With rising insurance costs and the challenges of courier work in London, My Car Recovery London provides a crucial safety net, offering peace of mind with round-the-clock breakdown assistance for couriers navigating the city’s demands.
Do van courier drivers need special insurance?
If you own a car or a motorbike, then, hopefully, you have some form of insurance policy to cover it. It could be simply third-party coverage or fully comprehensive, but by law, some form of vehicle insurance must be in place.
Courier drivers need a different kind of insurance because they are using their vehicles for commercial reasons. Couriers can be classed as private hire drivers as they transport goods under a pre-arranged agreement or booking. Some insurance policies allow individuals to work as both taxi drivers and couriers so long as all bookings are made in advance. But, courier insurance must be held by anyone delivering goods for payment.
Courier insurance policies may contain the following areas of cover:
- Goods in transit
- Vehicle insurance
- Public liability
- Personal accident and illness
Goods in transit
Necessary for any type of delivery driver as this will cover damage or theft of goods while in the care of the courier. This insurance often gives up to £50,000 worth of cover per consignment.
Vehicle insurance
An absolute necessity for anyone using their vehicle to make a living, and is required by law. Extra cover is usually available to assist with breakdowns and replacement vans so the courier can continue working after an accident, or vehicle theft.
Public liability
Again, a necessary part of the courier insurance policy. This protects any third party who suffers any damage, loss, or injury that is the fault of the courier.
Personal accident and illness
For anyone self-employed, getting sick or being injured can mean a loss of income. This insurance provides some financial aid while the courier recovers.
These are standard policies for couriers but pay as you go insurance can offer some advantages to drivers such as these.
What is pay-as-you-go courier insurance?
Pay-as-you-go insurance is also called pay-by-the-mile insurance, or usage-based insurance. Although different insurance providers set their policies differently, the basic idea of this type of insurance remains the same.
This kind of insurance is intended to reward any driver who has good driving skills and is seen to be safe behind the wheel, and low risk. In some cases, drivers only need to pay for their insurance as they drive for work, and can top up their payments via an app.
Pay-as-you-go courier van insurance is aimed at those drivers who have good road habits, and wish to be rewarded for their practices.
Do van couriers benefit financially from pay as you go insurance?
Potentially, all van couriers could save money by taking out usage-based insurance, as long as they drive carefully. In today’s economic climate, any cost-saving is welcome.
London’s cost-of-living crisis is leaving people with a third of their income once they pay for the essentials today. Running a vehicle is a necessary cost for a courier, but London is the most expensive place in the country to run a car or van. Petrol has risen by 23% in the last 12 months, while diesel has increased even more and is 27% more expensive than it was last year. Car insurance is also said to have risen by around 14% since 2021.
While nothing can be done about soaring fuel prices, it could be possible to reduce insurance premiums through the use of pay-as-you-go insurance.
If a courier using their van can display proven careful driving practices while working then they can benefit from lower premiums. Even courier drivers who aren’t perfect can gain some benefits too.
How can good driving benefit van couriers?
When claims against insurance companies are made, the overall effect is that premiums get pushed up for all. There is a certain element of the good paying for the bad in these instances, especially when fraudulent claims are made.
Insurance companies now use data obtained from how individuals drive to provide fairer quotes and renewal fees. Thus, good drivers get lower premiums instead of being penalised due to other drivers’ genuine, or false, claims.
The average courier’s daily rate if they are based in London is £222 which is 7% above the national average. However, self-employed couriers may not have work every day, they can become sick or get injured, their vehicles will suffer wear and tear, repairs need to be made, and they must pay their own insurance fees. Using pay as you go insurance means they have some control over this one area.
There are other benefits to this type of insurance, even for bad drivers. Feedback and tips are given to all policyholders to explain their driving habits. Through this information couriers and other drivers can improve in specific areas and also look forward to saving money on insurance in the future.
How do insurance companies know if you are a good driver?
Technology comes into play here. After all, insurance companies can’t follow every customer across London marking their driving. Sometimes a dongle is used to transmit data, but in the case of Zego, an app entitled Sense is used.
The app is downloaded to the driver’s smartphone, and measures driving habits including cornering and braking. Real-time monitoring gives the driver their score and informs them if they are on track to receive their insurance discount on the next renewal date.
The intention of pay as you go insurance is to provide safer roads to drive on with safer drivers using them. Although insurance is a legal requirement in the UK, sadly not everyone abides by the law.
There are more uninsured drivers on the streets of the capital than in any other part of the country. In 2020, research showed that there were 30% more uninsured drivers in London than anywhere else in the UK. If insurance premiums drop due to there being more infrequent accidents and fewer claims, perhaps there will also be fewer uninsured drivers out there.
Summary
Pay-as-you-go insurance may not be desirable for everyone. Not all individuals wish to be monitored and scored constantly. But, for many, especially those who work as hire and reward drivers, the savings can be very welcome.
Being self-employed and working as a courier carries a certain amount of stress surrounding driving in London’s traffic, meeting delivery times, and personal finances. Pay-as-you-go insurance could over time see savings on insurance premiums, and perhaps make London a safer place to drive.
