Van der Waals (vdW) coefficients can be accurately generated and understood by modelling the dynamic multipole polarizability of each interacting object. Accurate static polarizabilities are the key to accurate dynamic polarizabilities and vdW coefficients. In this work, we present and study in detail a hollow-sphere model for the dynamic multipole polarizability proposed recently by two of the present authors (JT and JPP) to simulate the vdW coefficients for inhomogeneous systems that allow for a cavity. The inputs to this model are the accurate static multipole polarizabilities and the electron density. A simplification of the full hollow-sphere model, the single-frequency approximation (SFA), circumvents the need for a detailed electron density and for a double numerical integration over space. We find that the hollow-sphere model in SFA is not only accurate for nanoclusters and cage molecules (e.g., fullerenes) but also yields vdW coefficients among atoms, fullerenes, and small clusters in good agreement with expensive time-dependent density functional calculations. However, the classical shell model (CSM), which inputs the static dipole polarizabilities and estimates the static higher-order multipole polarizabilities therefrom, is accurate for the higher-order vdW coefficients only when the interacting objects are large. For the lowest-order vdW coefficient C6, SFA and CSM are exactly the same. The higher-order (C8 and C10) terms of the vdW expansion can be almost as important as the C6 term in molecular crystals. Application to a variety of clusters shows that there is strong non-additivity of the long-range vdW interactions between nanoclusters.