Motor Fleet Insurance Renewals – The truth…06/03/2017
The dreaded motor fleet insurance renewal looms ever closer, and already you cannot see your desk for the amount of paperwork spread out over it, fear not, the insurance renewal process is not as complicated as it appears.
Timing – You want to start looking at your fleet renewal a maximum of 30 days before it is due. Any earlier than this for most fleets is an unnecessary waste of your time, and any later you run the risk of getting boxed in and having no choice but to renew.
Claims Experience – The first and most important thing to do is request and obtain your claims experience from your current provider. This “3 year claims experience” is your golden ticket to a successful renewal. With it you can shop around and gain alternative prices and quotes and what is even better, is that your current provider knows this. So conversely all the time you don’t have this “3 year claims experience” your current provider can essentially put forward their renewal offer, knowing full well that you cannot and are not obtaining alternative quotes and prices.
Need more time? – Most people are not aware that they can request a 7 day extension from their current provider if their renewal price isn’t released until the last minute. Once you have this extension it gives you a week to get alternative quotes and negotiate your renewal terms. This is especially useful if you have left it to the last minute and your current provider has not given you sufficient time to consider your options.
UK Insurers only – It is advisable to only take an insurance policy with a fully regulated UK Insurer. There have been a few notable offshore insurers go under in the last few years and with that comes many problems. If you find yourself on cover with an offshore insurer when it goes into liquidation you may lose all the premium you have paid and be covered by a policy that is no longer paying claims.
What should you be doing –
- Ensure you have an up to date and complete list of all your vehicles – all fitted equipment values must be included – and all modifications specified – all brokers who are quoting should have the same list with the same number of vehicles on it.
- Drivers – Have an up to date list and provide details on drivers under 25 – Name / DOB / Year passed UK licence and details of any convictions that driver may have, all brokers who are quoting should have the same list.
- Make sure you have got your “3 year claims experience(s)”
Your Confirmed Claims Experience, or CCE as it is commonly known may be all that stands between you and a good rate from your insurer. Sometimes just the cold hard facts on paper can paint an unfair picture of what kind of year you have had in terms of claims. If you are able to explain one large loss this can be removed from the rating, likewise if you have a relatively high number of small windscreen claims these need to be explained away to avoid them unnecessarily increasing your premium. If you can provide a claims listing alongside your claims experience then this will help, or you could just have a good old discussion with your broker who can then relay the information to the underwriters.
Although your claims experience just looks like a table or grid with numbers on, to the trained eye it shows how much your fleet is costing in claims, how much has been paid by your insurers over the years and how much they might or might not still be on to pay (claims being argued and negotiated still) and as such it directly effects the premium you will pay.
In basic fleet underwriting the main aspects that are considered are as follows:
1) Vehicle Years – This is an average of how many vehicles you have had insured throughout an insured period.
2) Claims Frequency – How many claims have been reported in that policy year. Remember this number will include windscreen claims, which can make the risk look a lot less attractive to a quoting underwriter.
3) Overall value of claims paid and outstanding – Give as much information on your claims as possible. It will likely work in your favour as the underwriter can consider the risk in its true light. Outstanding claims may have a low likelihood of getting paid (depending on circumstances) and as such rational reasoning can be used to get Insurers to ignore or reduce the impact of large outstanding payments.
4) Risk Management – Insurers look favourably on any proactive risk management put in place by a fleet operator to reduce the risk. This could be from very simple and cost effective implementations like employee paid excesses and driver handbooks through to more complex systems like Camera systems and Telematics. All of which are considered by Insurers when quoting.
Letter of Reporting Authority explained – If you are struggling to obtain your confirmed claims experience from your current provider and you are already in talks with a new potential broker then you may want to consider providing them with a letter of reporting authority. This will allow that broker to obtain the claims experience document from your current insurer or your behalf. Your current provider will be made aware of your request and may decide to “sharpen their pencil” and improve on your renewal terms to try and retain your business.
Letter of Appointment – If your current provider just isn’t cutting the mustard then you have the right to continue your cover but with another broker. If you sign a letter of appointment than your new broker will have authority to deal with your policy on your behalf and act as your agent. This can be done at any point throughout the life of your policy, but you may choose to do this towards renewal so the broker of your choice can deal with negotiating your renewal terms as well as doing an extensive market exercise to ensure you are getting the best deal. This should really be considered as a last resort if you are unhappy with your current broker.
Easy Renewal Guide
30 Days before renewal – This is the time to be requesting your confirmed claims experience from your existing broker. They should be going to your insurer and requesting this as soon as possible so you should expect this back within a week to 10 days.
14 Days before renewal – Hopefully by now you have received your claims experience. One thing to make sure is that you have got the full picture and not just the most recent year. If you haven’t received this yet then it’s time to get on to your broker to give them a gentle nudge to send it to you. If you have received, then great, you can get cracking with obtaining quotes form the market. (Helpful Tip – It’s advisable not to allow more than 3 brokers to get quotes for you as you can end up flooding the market which will have a negative impact on getting the best terms possible.)
7 Days before renewal – Hopefully now you have some quotes on the table to consider and discuss. If you don’t then it would be a good idea to get on to it and get them in. This will give you plenty of time to peruse all of the quotes and find which offering has the best premium and just as importantly, the best cover possible.
Last but not least look at broker fees. Ask your broker what they are charging in terms of commission and also the fee they are charging you. If this is excessive then request it be removed or ask them to justify such a hefty fee.
Overall the message is that the motor fleet renewal is not as daunting a prospect as it first seems and you should be in control. Ensure that your broker knows you are aware of the process, and that as your agent they should be acting in your best interests, do not let jargon and sales bluster get in the way of you understanding and controlling how your fleet renewal unfolds.
For further advice speak to Liam Chatfield, Fleet Account Executive, on 01634 868444.