By Natalie Albert, commercial director at independent insurance broker, Caunce O’Hara
Getting your fleet insured can seem like a confusing process, but with the right advice and guidance, it’s a walk (or drive) in the park.
There are a number of common oversights companies make when it comes to their fleet insurance. Most are genuine oversights due to not understanding what insurers need to be aware of.
These can include driver history and medical conditions. Many forget to notify insurers of medical conditions, so it’s always worth running it past your insurer to avoid getting caught out. Serious convictions must also be reported to insurers - these can include, but are not limited to - drink driving, driving without insurance and an accumulation of points. Insurers will want to be notified and failure to do so could invalidate a policy. It’s a good idea to conduct annual licence checks for existing employees and check all new employees upon appointment. Not informing your insurer beforehand could result in them refusing to pay a claim --and remember that you also want safe drivers!
In addition to the above, companies also make the common mistake of not notifying insurers of personally owned vehicles. These can be covered by most insurers on a fleet policy, but if they haven’t advised that the vehicle is personally owned, the insurer has the right to avoid paying for damage to that vehicle. As with all insurance policies, it’s best to be as transparent as possible with your provider.
Always make sure you fully understand your insurance policy, including its terms, conditions, endorsements and restrictions - if you are unable to comply with insurer requests you need to advise them immediately!
Did you know...
Most fleets, especially larger fleets, work on a quarterly or a six monthly declaration basis. Setting up a fleet in this way is beneficial for all involved, it saves time and administration costs of having to deal with invoice and adjustment documents every time a change is made. Insurers will provide user details for the Motor Industry Database (MID), which keeps track of all insured vehicles in the UK. When vehicle changes occur, the client or broker will log in and add or delete a vehicle. After this, every quarter or six months, the data is submitted to insurers, for them to adjust their premium. It’s in your interest to stay up-to-date, failure to update the MID can result in some of the following:
- A court prosecution with a maximum fine of £1,000
- The driver’s vehicle being seized by police
- £200 fixed penalty
- £150 plus car pound fees to recover the car
- Six penalty points and/or disqualification
- PLUS proof of valid insurance to have the vehicle returned.
Age restrictions on a fleet must also be taken into account. Companies can apply young driver exclusion or, if they do include young drivers, the policy wording will contain an increased excess clause. This won’t appear on the schedule, so it’s important to check suitability.
Another thing to verify is endorsements. Insurers tend to ask for a tracker to be fitted to vehicles with a high value. This varies from insurer to insurer, but it will usually be around £40,000. They clear up a lot of ambiguity, so if an insurer requires you to fit them; do it for the company’s benefit. If that vehicle goes missing, insurers won’t pay out if you have not complied.
All employers have a duty to ensure their employees are safe and this duty also includes how employees use their vehicles, which is even more important since the introduction of the Corporate Manslaughter and Corporate Homicide Act 2007. Driver training should be provided for all employees. Fleet drivers are particularly at risk as they often drive long distances. A policy should be in place on what is expected, to protect both the employer and employee.
Regular reviews of the claims experience can also assist with driver safety. This allows for identification of any trends, such as the same driver having accidents. Identifying these trends mean you can react appropriately, such as sending the driver on a training course, logging this in their HR file shows the company has taken steps to secure the safety of employees, it can also help reduce claims. Increased loss ratios will lead to a hike in premiums, its best that issues are caught early to be nipped in the bud.
Policies can be adapted in a variety of ways. The cover they provide, for instance, can be comprehensive, third party fire and theft, or third party only. There will be an excess applied, which can be increased for some drivers.
It’s also worth noting that when it comes to fleet insurance, there are two types of policy: any-driver cover or restricted cover — e.g. to drivers above a certain age. Often, this is 21 or 25, but this depends on the policyholder. With higher value vehicles, the minimum age could be over 30.
Fleet policies are like computers — they are as comprehensive as the input, which is why it’s important for the policyholder to keep the insurer well-informed, every step of the way. Finer details regarding policies obviously vary between insurersbut there are many things which are the same across the board, such as policy variations.
A quick and easy way to check if vehicles are covered is by visiting www.askmid.com. It’s an invaluable resource which links to the MID and is always worth checking before conducting any insurance policy preliminaries.
And finally — drive safe!