TAKING PROACTIVE ACTION CAN HELP TEMPER SPIRALLING FLEET INSURANCE COSTS
Venson offers top tips to help SMEs reduce the financial strain
New data on fleet insurance costs will be causing concern for businesses looking to renew commercial vehicle polices. Premiums are reported to have risen by almost 25% in the 12 months to June 2024*, but says Venson Automotive Solutions, employing simple proactive strategies can help businesses control and potentially reduce these expenses.
“Supply chain issues still blight the industry and technologically advanced vehicles are more complicated – and therefore expensive – to repair,” explained Simon Staton, Client Management Director at Venson Automotive Solutions. “These elements are of course out of the hands of the average SME, but some simple risk management practices can be implemented to help make premiums more affordable.”
Those responsible for overseeing company vehicles should make time to explore options. Self-insuring is one. It’s a form of risk management that requires a business to create a fund to pay for the claims. Instead of transferring all the risk to an insurer through the premium, some of the risk is carried by the business which only insures for any losses that may be caused to third parties, such as other vehicles, property or people. But it’s not a one-size-fits-all solution. The other option is to compare various insurance providers before automatically renewing or settling on a plan. Insurance companies offer diverse rates and coverage options, therefore, comparing quotes from different insurers may lead to substantial savings. However, it is worth keeping in mind that switching providers too often could serve as a red flag to providers, risking businesses missing out on the best prices in future.
Driver history and previous claims will also impact premiums. SMEs should check their drivers’ records periodically and provide regular training and incentives for driving safely. Dashcams and telematics can also help prove drivers are lower risk, so it is worth investigating which insurers offer usage-based policies. Reducing claims also relies on running a well-maintained fleet of vehicles which will go a long way in demonstrating to insurers that the business prioritises moderating risk.
Simon Staton continued: “The biggest influences on motor insurance costs are unlikely to go away quickly, so SMEs must act in other areas to reduce their premiums. Robust risk management practices and reviewing their approach to vehicle insurance will go a long way to managing insurance costs and protect their assets without compromising on coverage.
“Business owners and those responsible for managing company vehicles must also keep on top of vehicle maintenance and driver training to ensure they are not putting their firm or employee at risk. They might also want to consider alternative options like vehicle rental or pool cars for employees who drive for work infrequently. This can help to reduce mileage, fleet costs, insurance premiums and CO2 emissions.”
Venson tips to help keep fleet insurance costs down:
- Shop around for insurance quotes: Compare insurance providers to find the best coverage options at competitive rates. Consider factors like coverage limits, deductibles and discounts.
- Consider self-insuring: Bearing some of the risk can reduce the amount of premium to be paid to the insurer. It can result in significant savings, especially for a large fleet with a high volume of claims.
- Bundle insurance policies: Consolidate all your fleet’s insurance needs with one provider to potentially qualify for multi-policy discounts.
- Review and update your policy regularly: Stay informed about changes in your business that impact on vehicles you operate and then adjust your insurance coverage accordingly to avoid overpaying for unnecessary cover.
- Consider usage-based insurance: Explore telematics and usage-based insurance policies that track driving behaviour and offer discounts for safe driving habits.
- Think about paying for repairs directly: Depending on the nature of the incident that caused the damage, consider obtaining an estimate for a repair before making a claim so that you can compare with your policy’s excess.
- Present the risk management plan to insurers: Having a plan in place is encouraging for insurers, who may be able to offer funding to help implement elements of the plan which require financial investment.
- Maintain a clean driving record: Encourage your drivers to follow traffic laws and drive safely to avoid accidents and traffic violations that can increase insurance premiums.
- Implement safety measures: Invest in driver profiling and targeted training programmes, install safety features in vehicles and prioritise regular maintenance to reduce the risk of accidents and insurance claims.
- Install dashcams: Footage can settle at-fault claims and help defend against ‘crash for cash’ scams which push up the number and value of claims, leading to increased premiums.
- Opt for lower powered vehicles where possible: Bigger engine size means bigger insurance premium. If your drivers don’t need a large powerful vehicle, provide them with an alternative that will cost less to insure.
- Reduce journeys: Removing unnecessary journeys not only reduces milage and therefore premiums, but also helps reduce emissions and meet environmental objectives.