Fleet Insurance Introduction

Here at the Spencer Hayes Group we have a huge specialism in placing and managing Fleet Insurance solutions, so we thought it would be useful to share our knowledge to anyone running a fleet, regardless of size and trade.

The areas that we are going to cover are as follows:

• Starting a new Fleet Insurance policy – is it right for me?
• Confirmed claims experience – what is it?
• Protecting your confirmed claims experience
• Technology & training – what is available and what are the benefits?
• Specialist Fleet Insurance
• Additional products
• Top tips & bad habits
• Testimonials

Fleet Insurance is a large expense so the aim is to ensure that you take away some knowledge that not only helps you reduce your premium spend, but also helps ensure that you’re spending more time on your business than firefighting constant fleet issues.

By driving down the cost of your Fleet Insurance spend this can help you grow your fleet and, in turn, grow your business.

New Fleets

So you are considering starting a Fleet Insurance policy, however you’ve not looked into this before, therefore we’ve put together some pointers that will really help you when considering this.

Vehicle Numbers

When starting a new fleet an important consideration to begin with is “do I have enough vehicles to start a Fleet Insurance policy?” – it’s widely considered that 5 vehicles and above is the number required, however this isn’t true (although some insurers minimums vary), you can start a Fleet Insurance policy with two vehicles.

Transferring No Claims Discount

Although as a new Fleet Insurance customer the market is restricted as a large number of insurers will only accept clients with proven fleet claims experience. However, to those that will offer terms without this, they will accept no claims discount earned on individual policies.  Generally these will need to be in the company or Directors names; if these have been earned in employee names, then in the main, these aren’t acceptable.

It’s worth noting that once no claims discount is ‘absorbed’ into a fleet policy that you are unable to extract this. However, the savings made can be substantial and it is possible to issue a letter confirming the number of years claim free an individual as had on a fleet policy, which can be acceptable to some insurers.

Vehicle Ownership

Vehicles will need to be owned, leased or loaned to the company; some insurers will accept Director vehicles however insurers are less flexible on new fleets so it’s an important consideration.

Convictions

As fleet policies are designed for flexibility and to help reduce admin, it’s common for insurers only to be informed of serious or multiple convictions.  It is extremely unlikely that an insurer will need to be informed of minor convictions.

Don’t ‘flood the market’

Even though it sounds counter productive, engaging more brokers/insurers has an adverse effect.  If an insurer/underwriter sees the ‘risk’ presented to them on multiple occasions, then it ‘switches them off’ and can result in them not offering terms.

How do I keep the costs down?

The first year when running a Fleet Insurance policy is vital; a poor first year can dramatically increase your cost and on the flip side, a good year opens out many more markets and the ability to negotiate reduced premiums.

To keep costs down in the first year it’s important that you have all the information together, including age profile of drivers, overnight parking addresses, no claims discount available etc.  You can then look at increasing the excess on the policy and also increasing the minimum driver age (for example from 25 to 30 – you can always look at naming the odd young driver).

Also consider cameras and telematics which we’ll touch on later in another section.

Summary

A Fleet Insurance policy can be a fantastic policy, especially for those companies looking for ease when it comes to flexible open driving and adding vehicles throughout the year.  You’ll just be dealing with one universal renewal date and you won’t be hampered by insuring new vehicles without any no claims discount.

That said, if your vehicle numbers are to remain the same, you have already accrued a high level of no claims discount and if you’re happy with a low number of named drivers, then this may not be for you.

Claims Experience

Quite possibly the most important document to any fleet and this replaces the standard no claims discount.  A well run fleet generally translates into a good claims experience – insurers are understanding that running larger fleets will mean accidents, however low frequency and cost are imperative to help keep your insurance spend down.

Layout

Each insurer has their own layout for these documents, but they capture the same information to allow underwriters to see an annual ‘snap shot’ of how your fleet has run.  A typical example is as follows:

• Period of insurance
• Vehicle years (this is the number of vehicles covered within that period)
• Total number of claims
• Claims paid – these are amounts that insurers have paid/agreed to pay
• Claims outstanding – these are amounts that insurers have estimated that it could cost
• Both of the two above sections are broken down into the following segments:
  • AD (accidental damage – damage/replacement cost to your own vehicle)
  • F&T (fire and theft – damage/replacement cost of your own vehicle)
  • TP (third party – damage and/or injury to a third party)
• Position at last year – in claims experience of 2 years plus, then amounts can differ year to year as claims progress to final settlement – these can go up as well as down
• Excesses noted on the policy
• Calculated to date – this is to show how up to date the claims experience is
• Date of last claim

 

Burning cost

From this your insurers can calculate what is commonly known as a ‘burning cost’, which assists underwriters to establish what premium would be required to pay the cost of claims in the upcoming year.

3 Years

The aim of any fleet is to have three years and above confirmed claims experience – this is seen as extremely attractive to insurers.  Not only does it demonstrate your experience of running a fleet but also shows how the fleet has run over a lengthy period.

It also shows the number of insurers you’ve had – if you change your insurer every year, especially if you’ve done so over a three year period (commonly known as 3 in 3), then some insurers will refuse to quote.

The reason behind this is that everyone understands that you may have one poor year through shear bad luck, but if you change every year then that insurer wouldn’t be in a position to try to recoup their losses.

Help Tell a Story

A confirmed claims experience will provide a ‘snap shot’ however certain things will help ‘tell a story’ which helps explain to the underwriter what has happened, what’s been done to rectify and why certain elements are unlikely to happen again.  The same goes for a good/clean claims experience; help demonstrate the reason why it’s running so well rather than good fortune.

Certain things will certainly help – these are as follows:

• A claims listing (a separate document to your claims experience) – these will provide a more detailed report showing each individual claim
• Identify ‘one off’ large incidents and why this is unlikely to occur again
• Identify ‘repeat offenders’ – if you’ve got the same individual(s) continually causing claims, have they left the company, been given training or no longer have the authority to drive company vehicles
• Identify windscreen claims – these are, in the main, the lowest value claims by some distance and therefore aren’t viewed as harshly as other claims

Insurers Can’t Quote Without It

Unlike a wide number of insurance policies, fleet insurers require the confirmed claims experience prior to providing a quotation; not only for the previous year but up to the past 3 years+ (if available).  Therefore it’s vital to obtain this in good time – you can request this from your broker or sign a letter which will allow a broker to request this for you (normally takes up to 5 working days).

 

Protecting my Confirmed Claims Experience

Whether you’ve just started a Fleet Insurance policy or have an established fleet, it’s imperative to ensure that you protect it.  We don’t mean in the standard way in which you could protect a no claims discount (by paying an additional premium), this isn’t an option on a fleet, we mean by keeping it as ‘clean’ as possible.

This can be done in a number of ways which are as follows:

Regular Reviews

This is something that we undertake for all our clients at Spencer Hayes, which proves invaluable.  Looking at your claims experience shortly before your renewal date is far too late.  But by conducting regular reviews you can manage your claims experience to help ensure that no unnecessarily high ‘reserves’ are placed onto your experience.

It’s an ongoing service that we are extremely pro-active in; if your brokers aren’t faciliting this for you, ensure that they do.  It could be costing you a significant sum at your renewal date, and by then, it’s too late.

Reporting Claims Early

This is vital to ensure that any claims costings are kept to a minimum – if you’ve been involved in a fault accident then it’s imperative to contact your broker/insurer to report this as a matter of urgency.  If your insurers can manage the third party claim then they’ll also manage the costs, which will reflect in the amounts displayed on your claims experience.

Some insurers will also offer a reduced excess if claims are reported quickly, so it’s always worth having a claims reporting system that your drivers need to adhere to.

Rewards & Punishment

If you do have a telematics system that shows driving behaviour, then it’s important to use this to your advantage.  Ensure that erratic drivers are ‘pulled up’ on this prior to an incident occurring and also good drivers are rewarded.  We have many procedures/systems that can really help with this, which have amazing results.

Staff Turnover

An area that we check into is your staff turnover and if you utilise agency drivers – whereas agency drivers can be a necessity, if you have a high turnover of staff, be it agency or direct employees, it’s far more difficult to manage them, which can translate to poor claims experience.  That said, good staff retention is a positive thing, even if you have drivers with poor driving experience, these can be managed.

Allowing who can drive

It’s not always the case, however generally those drivers who are older and more experienced are less likely to be involved in a collision, so just be conscious when allowing younger drivers onto your fleet policy.  Perhaps look to limit them to smaller, less high powered vehicles and also restrict them to business use only.

Vehicle maintenance

It goes without saying that poorly maintained vehicles can result in accidents, it only takes worn brakes which can mean the difference in stopping in time and a claim adding £1000’s onto your experience.

Company Culture

It’s important to express the importance of safety above getting to the job at all costs.  Regular breaks along with creating a culture where safe driving, rather than speed, is paramount and always reflects well within your claims experience.

It’s also very good practice to provide your drivers with driver handbooks.

Technology / Training

Can prove hugely useful and due to this we’ve created it’s own specific section.

Technology & Training

Technology continues to develop and new products are being brought out to the market, plus with improvements in technology the pricing makes these are real investment.  Coupled with focused driver training this can have fantastic results.

We often get asked if insurers will provide a discount larger than the cost to install any equipment or to conduct training.  The honest answer is that it’s extremely unlikely and you shouldn’t really be looking at this just to receive an instant saving.

Think of it as more a long term investment. If utilised to it’s full potential then it would, in most cases, prove to be cost neutral at worst. At best, you will receive a return on your investment over the forthcoming years when you have a well-run fleet that is demonstrated in the claims experience you hold.

Some areas to consider are as follows:

• Telematics: These can be fantastic in monitoring driver behaviour, not only to help prevent accidents but also to allow you to track where drivers are and also reduce fuel costs along with wear and tear on your vehicles
• Cameras: These won’t prevent an accident, however it’s a completely impartial witness which helps establish liability when this may be otherwise in dispute.  Hardwired systems are always considered the best as these can’t be tampered with.
• Training: Driver training has been around for quite some time now and people consider looking at this for the full roster of drivers.  This can prove useful for not only driver behaviuor, like telematics, providing fuel savings and wear and tear reductions.

You can also look at focused driver training for drivers who have multiple or serious accidents.

• Trackers: These devices allow stolen vehicles and/or trailers to be located – insurers generally insist on these if a vehicle is over a certain value
• Walkround App: Whereas daily walkround inspections are valuable and, depending on the vehicle, a requirement.  Having an app to record these checks ensures that not only these are done, but any issues are recorded instantly

We work with selected partners that offer the above, however you may already utilise some/most of the above.  The question is, have you informed your insurers?

Specialist Fleet Insurance

Certain trades, due to the usage of the vehicles, require specialist insurance coverage and it’s vital that you partner with the right broker who has not only great knowledge, but also the agencies in place with specialist insurers.

These are an example of areas where we have a particular area of expertise:

• Courier/Hauliers
• Taxi
• Self Drive Hire / Credit Hire

Firstly, it would be remiss of us not to recognise the vital, and sometimes thankless work, that all the logistic companies around the UK conducted in keeping households and workplaces supplied during this pandemic – a big heartfelt thank you on behalf of all at the Spencer Hayes Group.

These are very specialist areas and unfortunately, due to the nature of the trade, these do not only attract higher premiums, but, due to limited number of insurers wishing to quote for these companies, it makes it much more difficult to shop around.

We have access to specialist schemes which allow for temporary cover. These can be as short as a week for those only requiring short term cover.

That is why it’s vital to ensure that you protect your claims experience (touched on in earlier blogs/videos) and also to implement the tips we have coming up shortly.

Extra Covers

There are also additional policies which you can purchase to offer added protection to bolster your fleet covers, which may prove useful:

• Breakdown Cover: This can be purchased as a block fleet cover which we can offer as a bespoke policy.  Here at Spencer Hayes we offer our own breakdown policy which can be specifically tailored to your requirements.
• Legal Expenses: This offers cover to claim back any out of pocket expenses such as excess and loss of earnings from a third party in the event of a non fault accident.  It can also be utilised to recover all your losses directly from a third party, therefore not involving your insurers.  At Spencer Hayes we offer this cover completely free of charge.
• Tools in Transit: We have access to a specialist scheme which provides cover for your tools/equipment whilst kept in your vehicle, including coverage overnight.
• Excess Protect: This provide cover for your excess which can prove extremely useful if your policy carries a higher amount.
• Guaranteed Vehicle: This is cover which provides you with a guaranteed vehicle in those circumstances where your insurers would not provide this, such as a theft or total loss.
• GAP: This cover provides you with any potential gap in cover between your settlement amount and the amount remaining on your finance.
• Goods in Transit: This is specific cover to provide you with protection for goods you are carrying, either your own or your customers

These are certainly worth considering alongside your Fleet Insurance policy.

Hints & Tips

Here are a few hints and tips which will certainly prove useful to any fleet operators, new or old, which are listed below as ‘Do’s and Don’ts’

Do’s

• Use technology and embrace driver training
• Ask your insurers/brokers about a ‘risk management pot’ to contribute to improvements (generally only accepted in fleets of a certain size)
• Ask your insurers/brokers about ‘low claim rebates’ (providing refunds for well run fleets as long as claims don’t hit a certain level) and ‘long term agreements’ (providing set rates with potential discounts over a period of 2-3 years) – again these will be on fleets of a certain size
• Review your claims experience on a regular basis with your broker/insurer
• Punish/reward poor/good drivers
• Pick the right broker – ensure that they’re a specialist in this area
• Provide a narrative alongside your claims experience/listing – isolating large claims, poor driver(s) and windscreen claims
• Have a set claims process to ensure promptness of reporting, along with collection of all the information at the scene including photographs
• Consider requesting a fleet on a ‘declaration basis’ if you are transacting a large number of adjustments – once again, fleets would need to be of a certain size to allow this. This means you are charged for adjustments quarterly, half yearly or annually.

 

Don’ts

• ‘Flood the market’ – by approaching too many brokers this will switch off underwriters and can result in them refusing to quote – this can prove extremely counter productive
• Wait until the last minute to obtain your claims experience/listing – you need to allow sufficient time to look for alternatives
• Insure vehicles in driver names, certainly not employees – if you’re looking at starting a fleet and you have done this, generally the no claims discount is unacceptable (unless it’s a company partner/Director).
• Leave things to chance – the more proactive you are towards the safe running of your fleet, then this will prove extremely beneficial
• Move insurers every year – having three insurers in the past three years (deemed as 3 in 3) will switch off a large portion of the market
• Leave your drivers to update you on any additional convictions – ensure that you conduct regular driving licence checks.