Instead of choosing between price and value when it comes to vehicle cover, Ashbourne Insurance’s Peter Smits suggests going for both.

Ashbourne Insurance’s Peter Smits

I’m often asked what the benefits are of transferring insurance from single-vehicle policies to a motor fleet policy – particularly among new or developing businesses where vehicle numbers are on the increase. Those who are used to progressing through the no-claim bonus scale, earning bigger discounts year-on-year, are nervous about the possibility of relinquishing this benefit. Equally, others are concerned that a single claim on one vehicle could impact all vehicles on the same fleet.

Both of these concerns are very valid. However, they should not be used as a barrier to getting a much more flexible insurance solution. It is true that there is a critical mass regarding the number of vehicles owned before the fleet option would become available: while some insurers would consider just two or three vehicles to quote for a fleet, these are few in number and any real price benefit would need a minimum of five vehicles.

Remember, all vehicles must be owned in the company name or at least registered to a company director for them to be considered under a fleet policy (the policy would be in the name of the business with directors’ interest noted, if relevant). When first transferring from single-vehicle policies to a fleet policy, we would advise that any premium savings would be negligible. It’s not always true but, in reality, what you are buying in the first year is flexibility.

One insurance provider and policy with a single renewal date for all vehicles is much easier to administer. All drivers would be issued with the same contact details for claim reporting – and for most vehicles you could specify ‘open’ driving. That means if your employees meet a certain criteria for age and experience – dictated by you prior to inception – then anyone with your permission can drive any vehicle.

There may be restrictions for high-performance or high-value vehicles, but these would tend to be business owners’/directors’ vehicles, which you wouldn’t want any random person to drive anyway.

A price to pay

Most policies would have pricing differences for ‘any driver aged 21 plus’ as against ‘any driver aged 30 plus’; the older the restriction, the bigger the discount. No claim bonus discounts for single-vehicle policies are still valid for up to three years past expiry so, if the fleet option doesn’t prove to be suitable in the long run, you haven’t lost your previous benefit. However, I very rarely see any business return to single-vehicle policies after having experienced the fleet option; ‘open’ driving certificates for single-vehicle policies are now almost impossible to obtain.

Individual claims affecting all other vehicles premiums within the same fleet is also a bit of a myth. Fleet underwriters work on frequency of claim rather than one individual claim. Indeed, it could be argued that one ‘large loss’ – let’s say £10,000 – is better than five smaller losses of, say, £2,000.

Once you do convert your vehicles to fleet insurance you will be issued with an annual declaration of ‘confirmed claim experience’ or ‘CCE’ as well as a claim listing showing circumstance, value, fault or non-fault, vehicle registration number and driver name. This information gives you access to your own claim performance – again, much easier than administering multiple single-vehicle policies.

As your motor-fleet experience builds then so does the number of insurers that will quote and as a consequence you will see premium reductions, subject to the CCE.

As I said, most insurers are looking for patterns rather than individual claims – and once you have had three years’ fleet experience you will see the most competitive rates offered, again subject to CCE. In my view it’s a no brainer – and fleet-rated business is currently cheaper than individual policies.

If you haven’t already, challenge your insurance provider to get you a quote!