What’s your policy? Neil Nixon advises on how to get the best LCV coverage for your fleet

What’s your policy? Neil Nixon advises on how to get the best LCV coverage for your fleet

Neil Nixon

Of an estimated 10bn [pounds sterling] ‘Gross Earned Premium’ in the UK motor insurance market, the commercial vehicle sector represents approximately 1bn [pounds sterling].

This sector, particularly within the 0-3.5t van category, is growing rapidly, and consequently the need for good insurance has never been greater. Claims costs continue to spiral with increased litigation in the UK and costs of personal injuries continuing to increase ahead of inflation.

The market is still dominated by brokers with direct writers on the increase but not at the speed seen in personal lines insurance. With reducing investment returns, insurers now have to realise an underwriting profit, further increasing the focus on cost management.

But what should the commercial vehicle owner/operator be looking for from an insurance policy? Colin Bayliss of Zurich UK says: “In my opinion, the key insurance issues for a commercial van owner or operator are: getting the vehicle back on the road as quickly as possible following an accident or loss; managing cashflow; and peace of mind (comprehensive of cover and ease of service).”

Bayliss continues: “While the market focuses on price, consumers really need to consider if they are getting value for money, meaning it really pays to spend that few extra minutes ensuring that what they are buying meets their needs. For example, are they getting the full picture from their broker on benefits and cover as well as just price? Have they considered what services they need such as: authorised repairers who guarantee the quality of the repair, courtesy vehicle cover, uninsured loss recovery services, motor prosecution defence, and automatic European cover (Green Cards)?”

There are other key points to consider when arranging insurance for your LCV fleet:

* How good is the service from your insurer–does it give you confidence about their claims handling service?

* Do you carry a claims contact number in the vehicle–the size of the claim and possibly therefore your future premiums are directly impacted by the speed of notification. The more notice you give the insurer, the more chance it has to effectively manage the claim for you.

* Have you checked the size of the excesses on young drivers? Remember excesses are accumulative, so if there is a voluntary excess, all other excesses will be added together!

* Does the policy meet the consumer’s needs in terms of use and driving–does obtaining a discount by reducing to named driver match the business need?

* Have you checked the detail of the cover? For example, most policies do not cover theft where the keys were left in or on the vehicle.

* If your vehicle is written off, will the policy continue when you replace the vehicle or will you have to start again?

Bayliss continues: “Zurich encourages fleet customers to look for value for money rather than focus on price–it’s not simply about basic cover requirements, but making sure you have adequate quality cover and considering the valuable benefits that can be available alongside the insurance. For example, Zurich offers fleet customers discounts on van rental, cover while motoring in Europe, free 24-hour recovery service, discounted pay-for-use breakdown and recovery service from AA (up to 25% saving) and a similar discount for AA Service Centre Network.”

Legislation impact

Corporate responsibility is hot on the agenda and likely to mean fleet managers have a greater responsibility for employees’ actions/driving. The whole aspect of corporate manslaughter is starting to have a far greater impact on the management responsibilities of companies with fleets. Bayliss says: “We fully endorse the need for fleet managers to see the importance of their responsibility in managing risk and driver safety.”

Another point to consider when selecting your insurance provider, and one that is impacted by legislation, is that the financial strain of complying with the Financial Services Authority requirements could be a bigger burden than some brokers could bear. It has been estimated that up to 1800 brokers could be no longer trading by 2005–how confident are you that your broker will be there for you in the long term?

The legal introduction of the Motor Insurers Database (MID), with its requirement to be continually up to date, will mean that all van owners need to notify their broker or insurer as soon as practically possible. Bayliss continues: “While the legal introduction of MID is putting additional pressures on companies to deal with the administration of fleet management–there are solutions to managing this responsibility efficiently and effectively. Zurich provides a web-enabled solution that helps the customer do this.”

There are many things a fleet manager can do to assist in minimising insurance premiums. These include: driver assessment and training, heavily putting the emphasis on driver awareness and developing safe driving best practice and a culture within their business that endorses the need for this; installing security equipment, including alarms, immobilisers, deadlocks etc; and ensuring that vehicles are parked safely and securely at night.

Many insurance providers offer comprehensive protection, specifically tailored to meet the needs of commercial van drivers. Take your time to consider the alternatives.

One final thought–look around and seek out the policy that reflects your specific requirements. Cost will obviously be a consideration … but the cheapest isn’t always the best.

TELEMATICS: HELPING TO REDUCE INSURANCE PREMIUMS THOUGH RISK MANAGEMENT

One of the main developments in the fleet management sector has been risk management, which was previously confined to driver training. Now companies are using telematics technology to manage risk better–and therefore reduce insurance premiums–through increased visibility of employees and mobile assets, vehicle theft recovery and historical reporting of driving habits.

Research shows that over 1200 vehicles are stolen in the UK every day and only 42% of these are ever recovered. According to Cybit, a telematics service provider, using a stolen vehicle recovery solution increases the recovery rate to 97%, with an average trace time of 30 minutes. Combining this level of risk management with online fleet management capabilities offers fleet managers lower insurance premiums, reduced vehicle replacement costs and the ability to get a stolen vehicle back on the road quickly.

And it’s not just stolen vehicles that pose a problem to fleets. According to Mark Keavney, motor fleet product manager at Norwich Union: “Commercial and fleet drivers are 30-35% more likely to have an accident than private motorists.”

Cybit has a strategic partnership with Norwich Union as part of its Roadsense initiative to help reduce fleet accident rates, and a focus on providing solutions for improved risk management and potential insurance savings.

John Wisdom, sales and marketing director for Cybit, says: “Excessive speed and tiredness after driving long hours are contributing factors for higher accident rates. With our solution, for example, fleet managers are able to use the software’s advanced reporting capabilities to analyse drivers’ performance so that they are able to decide which drivers need additional training to ensure they are driving safely, This empowers companies to fulfil the duty of care to their drivers and reduce accident rates.

“Fleet managers are looking for cost-effective solutions that improve risk management and offer the potential for reduced insurance premiums. Organisations such as construction companies often use GPS-based devices to provide a vehicle recovery service for expensive assets. Now it’s possible to add further functionality to the firmware of the in-vehicle unit to open up the possibility of advanced fleet management via the web.”

TAILOR-MADE FLEET FUNDING

Renault is now offering its UK fleet buyers a bespoke funding product through its finance wing, Renault Financial Services (RFS). Called Renault Business Finance, the product is tailor made to suit the Renault product and the UK fleet market.

Although the marque already offers funding through Overlease for fleet deals across Europe, it decided that a specific finance product was needed for the brand to avoid confusion in the market.

Keith Hawes, fleet director Renault UK, says: “The goal of Renault Business Finance Will be to support the growth of Renault in the UK fleet market, today and into the future. We will achieve this by ensuring we provide a winning combination of products and services, competitive offers to the market and excellent levels of customer service to Renault customers and the Renault dealer network.”

SOURCING THE BEST DEAL

Insuring a van, whether for commercial or private purposes, can not only be time-consuming, but also expensive. However, a new service promises to remove the hassle by shopping around on your behalf from over 20 leading insurers, therefore securing you the best price.

UK Van Insurance Online offers a no-obligation freephone quote service, which is available for individuals and businesses requiring insurance quotes for commercial vehicles.

Jason King from UK Van Insurance Online says: “This new service will prove invaluable to businesses and private van owners alike. Rather than spending ages completing lengthy forms or ringing around for the best quotes, just one phonecall to us does it all. It’s quick, easy and reliable and we are confident that we can give a customer the very best quote for insuring their van or other commercial vehicle.”

GLASS’S ADDS INSURANCE DATA TO ITS COMMERCIAL VEHICLE GUIDE

Glass’s Information Services has begun providing guidance on the insurance group classifications for vehicles available on the used market in its monthly Guide to Commercial Vehicle Values.

“The data sourced from the Association of British Insurers is comprehensive and is a key element in making the final calculation to decide premiums,” comments George Alexander, chief editor, commercial vehicles at Glass’s Information Services. “We believe that this additional data will be of benefit to subscribers–ultimately we will provide a listing of the suggested insurance rankings for all those models that dealers might have an interest in.”

ZURICH RELAUNCHES ITS COMMERCIAL CAR AND GOODS–CARRYING VEHICLE COVER

Zurich has relaunched its commercial car and goods-carrying commercial vehicle policies so that customers can get cover and benefits in one package.

Available via brokers over the internet, cover for small businesses can be obtained in just seven minutes, with Zurich issuing the certificate within 48 hours, removing the need for cover notes. In addition. Zurich will also register the vehicles on the Motor Insurers Database (MID) and update the MID whenever necessary,

David Smith, business operations director for Zurich’s UK Commercial business, says: “Small businesses operate in a fiercely competitive environment. They need to be free to focus on their core business and reduce the amount of time spent on red tape and administration. Our new set of online insurance products are designed to be easy to understand, flexible and available at the press of a button.”

COPYRIGHT 2003 DMG World Media Ltd.

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