Goods in Transit Insurance Explained

Goods in transit insurance is designed to cover goods against loss or damage while being transported from one location to another and focuses on providing a high level of cover for the contents of your van. If you are working as a courier or in the haulage industry, either self-employed or as a contractor, you will need to make sure you are covered. Find out more in our helpful guide.

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Goods in transit insurance – what is it?

Goods in transit insurance (GIT) protects the goods you are carrying while they are in transit from one place to another or while they are being stored during the course of the journey. Any business can arrange cover for goods in transit while in their own vehicle, a hired vehicle or by a third-party carrier.

Even the most basic policies will cover the goods you are carrying to some degree. When comparing different policies, you should look for goods in transit cover that’s high enough to meet or exceed the value of the cargo you are carrying.

Goods in transit insurance is usually sold as an optional extra and the level of cover you choose will usually determine how much extra it is likely to add to your premium.

Different categories of Goods in Transit insurance

Different insurance companies and different van insurance policies will all have varying levels of cover depending on the frequency and type of cargo you’re carrying. Finding the right policy will largely depend on your personal circumstances. If you use your Van for transporting goods, you’ll usually fall into 2 categories:

  • Own Goods

    This normally refers to your tools of the trade or any work-related equipment. If you transport your own goods in your work van, you’ll need a commercial van insurance policy. Vancompare.com will help you shop around and compare quotes to get the best deals.

  • Courier (Haulage)

    if you get paid to move cargo or transport goods that don’t belong to you, then you need a courier or haulage insurance policy. These policies vary greatly between each insurer, as does the level of cover. Always shop around for the best deal and make sure the level of cover offered suits your personal circumstances.

Goods in transit insurance levels of cover

When you take out a goods in transit insurance policy, you need to be aware of exactly what type of cover you have. There are 2 main types of cover

  • New for old

    This is obviously the best, and usually most expensive option for goods in transit cover and means you will get full compensation for your goods regardless of their age. New for old ensures that you get like-for-like replacements for what you are claiming. This means the exact same, new version or the same make, same model as the goods that we lost, damaged or stolen.

    New for old gives better peace of mind to business owners. This option usually costs a little more but is seen to be a small price to pay in the event of loss, damage of theft. That being said, there are some categories of goods that won’t be covered under new for old policies. These tend to be the smaller, more fragile items that are prone to damage during transportation or those that quickly deteriorate with age.

  • Indemnity Cover

    The alternative and cheaper option to new for old is an indemnity policy which is often referred to as wear & tear cover.

    Indemnity cover will only cover the goods in the condition they are in at the time of damage or theft. In simple terms, a business that’s making a claim for machinery that’s 5 years old, will only be paid out at today’s price. In this case, annual depreciation is taken into consideration.

    Although an indemnity policy costs less, it’s worth noting that in the event you need to claim, the pay-out may not cover replacing what you have lost. In this case, your business could see itself in some financial difficulty from loss of business and the cost of replacing the items at a higher price.

What does goods in transit insurance cover?

Every insurance company is different, and you always need to check carefully to see exactly what you are covered for and to what level. Some of the standard inclusions in a GIT policy are:

  • Theft

  • Damage by accident while in transit

  • Damage in transit

  • Loss

  • Delays

Should your customers' goods, materials or cargo become lost, damaged, or stolen, you will have peace of mind that everything is covered. Make sure you know the value of your load and that the policy you have is enough to cover it should the worst happen.

What’s not covered?

Of course, as with any insurance policy, there are limitations. For instance, transporting livestock, hazardous materials or human remains will almost certainly not be covered by most providers while the transportation of foods, liquids or perishables will require a more customised quotation.

Further limitations may also be applied to high-value electronic goods and those deemed “theft-attractive” by the insurance company. Items such as iPads, iPhones, laptop computers and camera equipment may only be covered to half their value.

Many insurance companies will also not cover you for damage in the event that the goods you are carrying are not properly packaged and secured in your Van. As always, make sure you read your policy wording and ensure you fully understand any limitations imposed by your insurers before you buy.

Many insurers don’t cover your goods when stored in the Van overnight. It’s highly recommended to look for a policy that will cover your goods when left overnight in your Van. If it’s not possible to unload at the end of each day or if you regularly make overnight stops on your route, this additional level of cover is essential.

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