Progressive Fleets Must Make Insurance-worthiness Their Goal

Specialist fleet insurance broker, McCarron Coates, says insurance inflation, increased vehicle theft rates and a new motoring offence are three factors combining to make a fleet operation’s insurance-worthiness just as important a focus for professional fleet managers as their vehicles’ roadworthiness.

As fleets go through 2024, they will have to exercise better insurance premium control, if they are to effectively manage budgets and margins.  This will mean taking a firm grasp of risk management and asking just how insurance-worthy their operation actually is, in the eyes of an insurer.

The backdrop to this will be the fleet’s own level of compliance with company and motoring law.  Fleets will have to demonstrate they have systems in place to ensure elements of risk management, such as the daily walkaround vehicle check, actually happen and also show that strategies exist to manage areas of roadworthiness compliance, including tyre checks and replacements.  They should have systems in place to red-flag dates of MOTs and any licence or CPC expiry dates that apply to their drivers.  

Showing they are going beyond the norm, by having driver behaviour monitoring technology in place, to highlight any dangerous behaviours such as speeding, poor cornering and harsh braking, will also demonstrate better insurance-worthiness.  

Installing cameras or audible devices alerting drivers to the presence of other road users, is another tick in the insurance-worthiness box.  If inward-facing cameras are deployed, to pick up on driver behaviours such as poor concentration or distraction, even better.

More insurance-worthiness can be demonstrated to a prospective insurer through operating driver training programmes and running refresher courses.  Demonstrating how driver recruitment strategies focus on only employing better drivers with good driving records, is another good tactic.  Having strong controls in place to check licences, permissions to drive certain vehicles, and eye test certification and other medical records, can also show a serious approach to risk management.

As the cost of living crisis drives up theft and crime rates, insurance-worthiness is also about fitting devices that can prevent theft of vehicle or goods and also potentially keep drivers safer from attack.  These could be standard tracking devices, particularly Thatcham-approved products, but could also be devices that solve issues such as courier van theft during delivery drops.

With tradespeople’s vans also frequently moved just to steal the tools on board, having a tracker that can alert the owner if the vehicle is tampered with or moved, can also assist the insurance-worthiness rating.

Staying as claims-free as possible is very important, so fleets should work with an insurance broker who will pro-actively analyse trends within claims, to pinpoint where changes could be made, to avoid future issues.  

This might mean training a particular driver, to address individual weaknesses, or making changes to a route, or being more alert at certain times of day.  Getting a grip of claims history can provide many useful lessons, which prevent similar claims going forward.

Having fast claims reporting strategies in place is another vital area of insurance-worthiness.  Insurer figures highlight how a claim reported 25-30 days after occurrence, can easily cost more than four times as much as a claim reported on day one.  Some put the increase at 396%.[i]  Training drivers to report claims fast and giving them the technological tools to do this, such as a QR code and App that McCarron Coates can provide, is key.

Then there is the relatively new offence of Causing Serious Injury by Careless or Inconsiderate Driving.  Drivers need to be fully briefed on the implications of this June 2022 addition to motoring law and be made aware that prosecution could result from being involved in any incident which causes an injury as seemingly minor as a fracture or broken bone, if a careless or inconsiderate behaviour was responsible. 

This could be anything from fiddling with the radio controls to unintentionally going through a red light.  With no fines applying to conviction, just a driving ban and potential prison sentence, any convicted driver could be off the road and unavailable to a fleet for some time. There is also the possibility of employer prosecution, if their negligence in addressing an issue were found to be an underlying factor in an incident.  

Having the right defence in place for such charges is another important part of insurance-worthiness, which is why McCarron Coates offers its clients and their drivers instant legal representation, if a driver is involved in an incident to which the police are called.  Not all incidents can be justifiably blamed on a driver’s actions so it is important to have the facts assessed correctly, with the help of a lawyer’s representation.  The RTC Crisis Line service can be the difference between a driver being wrongly convicted and not facing that impact on their career.  It can be the difference between them having a criminal conviction against their name and maintaining a clean driving record.

McCarron Coates director, Ian McCarron, says, “We want all fleets, whatever their nature or size, whether consisting of company cars, vans, buses and coaches, or HGVs, to really pay attention to their insurance-worthiness and keep this concept in mind, when managing their roadworthiness obligations. 

“Whilst it may seem a less tangible concept to grasp, it is a vital and multi-faceted one, comprising lots of actions that together combine to create a better image of a fleet, for presentation to an insurer.  The plus side is that, in striving to impress an insurer, a fleet is inevitably better run, easier to manage, experiencing less downtime, boosting its productivity and becoming increasingly profitable.   It is not just insurance premiums that can be kept down but many other costs associated with poor risk management too. Insurance-worthiness is a win-win for both fleet operator and insurer.”

Transforming clients’ insurance-worthiness is McCarron Coates’ forte, so if you wish to benefit from its insight and innovative approaches to risk management, call the team on 0113 298 3489.  More information can be found at www.mccarroncoates.com       

[i] Insurer Allianz has produced the following data with regard to late reporting, which relates to a simple RTA scenario where an Insured driver hits the rear of a stationary Third Party (TP) vehicle with moderate damage caused. The third party was driving an S3 rated ABI vehicle (i.e. Ford Focus) and its driver sustained whiplash.

Notified on

Estimated Repair outcome 

Estimated Hire Outcome

Estimated Personal Injury (PI) Settlement

Total Cost

% Increase on Report Delay

Day 1

£1,500

£500

£3,000

£5,000

0%

Day 5

£1,800

£1,700

£4,000

£7,500

50%

Day 15

£2,600

£2,400

£6,500

£11,500

53.3%

Day 30

£4,000

£7,500

£8,500

£20,000

73.9%

*The figures produced in this table are illustrative based on assumptions triggered by delayed reporting which takes into account increased risk of credit facilities, loss of MoJ portal status, and escalation to more aggressive lawyer teams that build damages.

Meanwhile, QBE has produced the following. Here, the context was similar but the vehicle was a P5-rated ABI hire vehicle (BMW 520).

Notified on

Estimated Repair outcome 

Estimated Hire Outcome

Estimated Personal Injury (PI) Settlement

Total Cost

% Increase on Report Delay

Day 1

£7,127

£0

£0

£7,127

0.0%

Day 7

£8,845

£4,285

£900

£14,030

96.9%

Day 15

£8,845

£6,042

£4,070

£18,956

166.0%

Day 25

£8,845

£22,204

£3,830

£34,879

389.4%

*TQBE Insurance - he figures produced in this table are illustrative based on assumptions triggered by delayed reporting which takes into account increased risk of credit facilities, loss of MoJ portal status, and escalation to more aggressive lawyer teams that build damages.

Ends

Editors notes

McCarron Coates is an award-winning insurance broker, based in Morley, Leeds, which is a specialist in fleet transport insurance and other niche areas such as roofing, scaffolding and woodworking insurance. It also supplies many other types of commercial insurance policies and risk management services, to clients nationwide and is highly respected as an industry thought-leader, within its individual spheres of influence.