Lowering fleet insurance costs

Since the outbreak of the COVID-19 virus, The UK and other countries around the world have restricted the movement of their citizens. With this restriction in place, the use of motor vehicles has dramatically been reduced. This reduction includes the many businesses that hold fleet insurance policies on their vehicles.

How does the Virus outbreak affect vehicle fleet insurance?

With many business operating fleets, like vehicle rental agencies and businesses that own fleets of vehicles for their employees to use. The need for the different levels and kind of road risk cover is no longer valid until the lockdowns end for these organisations. If your business has halted, SORN may be the solution.

The types of cover not needed when the vehicles are parked for an extended period of time include Motor Third-Party Liability Insurance. If you have a policy for business breakdown cover, contact the provider and see if you can negotiate a discount.

Why should a business owner reduce their vehicle fleet insurance cover now 

Because the fleets of vehicles are in lockdown just like the drivers, there is a total absence of risk from events encountered on the road, makes those portions of the policy unneeded.

With the lockdowns still going on, a lengthy amount of the time the cover has been active has been useless to the policyholders. For those with large vehicle fleets, the amount spent on this unneeded cover is dramatic.

lockdown period         percentage of premium not used             cost of £10,000 premium

                                                                                                                   paid but not needed

1 month                                               8.3%                                                            £833

2 months                                             16.6%                                                          £1,667

3 months                                             25.0%                                                          £2,500

With the length of the lockdown still unknown, the business owners holding fleet insurance are struggling to ways to find cost-saving measures until they can open their business once again. By contacting the insurance firms holding the policies and negotiating a refund or change to the policy which reduces the cover is the only logical and financially responsible path to take at this time. You may also consider reducing any software costs, including fleet risk management software 

Won’t insurance firms offer refunds on their own?

At this time, there are record profits being racked in by insurance companies that protect motor vehicles. From The Nottingham Post, UK car insurers set to make more than £1bn profit if lockdown lasts for three months.

On Tuesday of last week, The Guardian made this announcement that Admiral to give £25 car insurance refunds over coronavirus lockdown. This is the first UK motor insurance firm to do so in following the same types of rebates to their customers who are in lockdown and can’t use their vehicles as US insurance firms are.

At this time, no formal action has been taken by other insurance firms other than Admiral. The rebates they mentioned are scheduled to be sent out or applied to premiums at or near the end of May 2020.

For those holding vehicle fleet insurance policies, it is advisable to contact your policy issuer and inquire about a rebate or change the types of policies you have while this lockdown continues. For some, an alternative might be covering your fleet vehicles with a SORN cover, but that requires a change of how the vehicles are officially registered with the UK government.

The large insurance firm Ageas in the UK is offering help during the lockdown with  their coronavirus webpage, where individuals and business fleet owners can go to for assistance in modifying their cover.

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