We have been arranging insurance for clients fleets for nearly 30 years, and are often asked how insurers arrive at their prices as there seems to be a very wide variety of premiums for what seem to be very similar vehicles and companies.
In reality, the fleet insurance market all work to very similar underwriting methods. When it comes to fleets, this is relatively simple. They will have a base price for a vehicle dependent on factors such as location and trade, and this will be discounted (or loaded) dependent on the claims experience. This is why insurers require at least 3 years claims experience to rate a fleet policy properly. Less than 3 years and discounts available may be reduced.
So how can you reduce your premium per vehicle without reducing your cover or having to take a significantly higher excess, or possibly moving to an inferior insurer that you would prefer not to use?
The simple answer is to improve the claims experience. But how can that be achieved easily and without significant cost?
With Transport for London introducing minimum safety levels stating that vehicles over 12 tons must have to acquire a licence to operate in London, it’s clear that vehicles are now being manufactured with higher levels of standard safety features, such as additional mirrors, all round cameras and audible warning for certain manoeuvres, and the public are expecting companies who operate vehicles to ensure they are being driven safely.
If you are unsure of the new TfL requirements you can obtain an update here http://content.tfl.gov.uk/hgv-safety-permit-guidance-for-operators-entering-london.pdf
Don’t forget, if an accident is as a result of poor vehicle maintenance or results from how a company has managed its responsibility for driving at work Health and Safety, then the company may be open to prosecution from the HSE.
As we become slightly more comfortable that our driving may be monitored, we should be able to positively embrace some of these changes in the knowledge they will reduce accidents.
What is also becoming apparent, is that where you have video evidence of an accident, it can often make the difference of being your word against the other motorists. There are many clients who have claims on their policies that would have been fully recovered if they had enough evidence to prove their version of events.
Appropriate internal procedures may need to be considered to ensure that the monitoring of employees driving is with their knowledge and for specific purposes, but employees quickly see the benefits when they can be vindicated by camera evidence for any damage caused as a result of an accident.
Front and rear cameras can be purchased for under £50 now and can be one of the best value options for clients looking to reduce their accident costs. If you know you are being filmed driving, you may just be a little more cautious!
For HGV’s, some insurers will have schemes that are only available to fleets where all vehicles are fitted with suitable cameras.
Insurers will also look positively on any positive risk improvement measures taken, especially if these have been done voluntarily.
What other cost effective measure can be taken?
- There are numerous online driving courses that can be well worth taking for employees who drive. Again, these start from around £15 for each person, and be very effective as part of the overall risk management programme. Insurers also like to hear that drivers do an online review annually, or when they have had an accident.
- Have a company driving at work handbook detailing what is expected from each company driver and ensuring they receive a copy and comply with any requirements.
- Ensure you have undertaken a work related road safety risk assessment and recorded the results.
- It may sound obvious, but do you record that all drivers have had a recent eye test?
- What induction training is undertaken and recorded, and is this reviewed regularly?
- Vehicle tracking devices can also be fitted at reasonable cost.
If you have these measures in place and can evidence how you monitor and use the information they provide, insurers will look very positively on the insurance compared to a very similar looking company that haven’t taken any risk reduction measures.
Once you start to reduce the frequency and severity of any accidents, the claims costs can reduce dramatically, and this will be reflected in the insurance premiums.
And don’t forget, you have a legal requirement to undertake a Work Related Road Safety Risk Assessment. Ensuring these are taken seriously and communicated in a positive manner should ultimately reflect in the reduction in accident costs and insurance premiums.
We have a variety of publications and templates that we can provide you with that will start you on the route to documenting your work related road safety policy, which in turn we can use to provide to insurers when requesting a quotation.