No one likes paying insurance premiums but the right coverage could prove vital
Insurance. It’s a bit like tax. You know you have to pay tax for those services you require when you need it - such as the NHS. But until you need those services no one likes parting with too much of their hard-earned to the taxman.
So it is with insurance. No one likes paying insurance premiums - they always seem to be going up, too - until, of course, you need the services of an insurance company. And that could be vital. If your car is off the road for any time thanks to an accident, so are your chances of making a living. So it’s important that, however unpleasant, you make sure you insure the right risks.
This is important. One insurance insider told us this piece of advice: don’t insure on price alone; make sure it has what you need. And, most of all, make sure it is commercial insurance for your car, not private car insurance.
For most chauffeur and private hire firms, at the top of the must-haves is a replacement PCO-licensed car should your car be off the road due to an accident (fault and no fault) or theft. Steve Humphriss from GSI insurance brokers says: “It might be prudent to also include public liability, so you are covered for people alighting from your vehicle. Some personal cover might also be a good idea that covers you if you are ill and are not able to work. Otherwise that’s about it. There is professional indemnity insurance, but I can’t really imagine a claim ever coming in for that.”
Other areas that might be covered include legal expenses and motor defence prosecution cover; breakdown cover (depending on the age of the car and the manufacturer’s inclusive from new); and keycare (should your keys be lost or stolen).
Individual or fleet insurance?
You can decide to cover your cars individually or as a fleet, although if you have only one car the latter won’t apply. There are some advantages to both approaches. Fleet policies are for firms who own multiple vehicles in the same name. This can be as few as three, or three hundred. Fleet insurance can be cheaper than taking out individual policies. But there are some drawbacks.
Fleet policies are rated on claims experience, which can go against you. The whole fleet is rated on the record of the worst car. So, say if you have three cars, it might be worth insuring each one individually so each car operates within its own ‘walled’ protected no claims bonus environment. So if you have a claim on one car, it doesn’t affect the other two. A good insurance broker will be able to advise you on the best course of action.
Hire and reward - is it the same for all?
Some brokers we spoke to said it made no difference to the insurance quoted whether you were a chauffeur or a private hire operator. But that view wasn’t universal, and obviously it pays to look around and take advice.
This is what Joe Manning from Towergate Manning, specialist chauffeur hire insurance brokers, has to say: “The term chauffeur is very subjective and when it comes to arranging private hire insurance being a chauffeur as opposed to a taxi driver will normally result in getting a better deal on your premium.
“We work closely with underwriters to develop schemes designed for professional chauffeurs,” continues Joe, “which means we do not insure higher-risk minicab and taxi-type business, so that we can offer excellent cover while maintaining premiums for our clients.”
Joe says when assessing a client for cover, Towergate Manning looks at several factors to establish the risk profile. This includes:
What type of work do you do, for example is your work contract work for specific customers or corporations?
Is all work pre-booked or are two way radios or data monitors used?
What experience do you have as a chauffeur?
What type of vehicle do you drive?
“With this information it enables us to present a good quality risk to our insurer panel. Good quality risks generally means having fewer insurance claims, which in turn means insurance premiums are kept low. So our professional chauffeur clients receive the benefit of being a good quality risk rather than paying the higher rates that a taxi or minicab driver would attract.”
This is tough on private hire taxi firms, but demonstrates how providing relevant details can help insurance brokers to place your business in the right areas.
Where to look for insurance
James Burton from Swinton Insurance offers this advice: “Have all details to hand when shopping around for prices and ensure that this information is accurate. Find out exactly how many years no claim bonus you are entitled to, as well, while introductory discounts are available for private car bonus and proven fleet experience.”
As well as companies such as Swinton, it is advisable to have a look at many of the specialist insurers that deal specifically in chauffeur and private hire insurance, as well as specialist areas such as wedding hire.
Graeme Trudgill, the British Insurance Broker Association’s (BIBA) technical and corporate affairs executive, suggests peace of mind with the approved brokers on the association’s website. “There are plenty of brokers there,” he says. “But don’t put up with the first opinion you get; always obtain a second one,” he says. “The other thing to remember is that you can talk to an informed broker about how to make the insurance fit into your budget.”
What about the cost?
Unfortunately, the cost of insurance for reward and hire is increasing. “The taxi market is being subject to the many influences across the wider motor market; in particular the increased claims costs caused by personal injury (people reacting to the “if you have been injured” adverts),” warns Swinton’s James Burton.
“As a result, premiums are expected to rise sharply this year and many insurers are considering their position in this market. To address this we have extended our broking panel in 2010 with access to several new markets and remain highly competitive,” says James.
This was a similar story to everyone we talked to. The cost of insurance will rise. It’s not been helped by four of the five main insurance companies involved stepping back their involvement - HSBC Insurance; Jubilee; Brit Insurance; and NIG - leaving Aviva still fully committed to the market.
“Basically, we’re seeing a market that has a lot of claims,” explains BIBA’s Graeme Trudgill. “Personal claims are on the increase; chauffeur and executive cars are expensive and require business replacement cars as part of the insurance provision. And for nine of the last 10 years insurers have had losses on their motoring book. On top of this, chauffeur and private hire drivers have got more exposure to the risk of an accident simply because of the miles they drive.”
Graeme suggests these tips to keep down the cost of insurance:
Avoid claims! Try to use caution when driving
Look at what you can afford to pay as the excess element
Garage the vehicle if you can - there are discounts for this
Fit a security device - insurers offer discounts
Newer and bigger cars are more expensive to insure - look at the vehicle groups, particularly for private hire
Older cars can be cheaper to insure because their value is less
Joe Manning from Towergate has some additional advice. “Underwriters are always keen to insure chauffeurs with a proactive approach to risk management, in particular fleet operators,” he says.
This can include vehicle security, for example fitting tracker devices. Tracker has recovered some 19,258 vehicles and saved insurers and in turn their customers £422.9m.Other areas include driver training, which is an invaluable tool for reducing the incidence of accidents which in turn reduces claims and maintain premiums.
“Another type of risk management includes in car cameras such as Truscene to monitor accidents or incidents. Truscene can form the cornerstone of a risk management process that will help you reduce the number of accidents that your vehicles are involved in by up to 70%,” adds Manning.
What happens if you are involved in an accident?
Should the worst happen and you are involved in an accident, what should you do? The first thing is not to panic, but take all the details of the scene and pictures - they can always be handy later on.
If your car is involved in an accident which causes injury or damage, you must give your name and address, and insurance details to those involved. Take the same from the other drivers involved, but do not admit liability. If anyone is injured, call the police. If they do not attend the scene, or if someone else’s property has been damaged, the accident must be reported to the police within 24 hours.
Contact your broker or insurance company and report the accident, whether or not you intend to claim. They will advise on the next course of action. You must tell your insurance company about the accident, even if you do not intend making a claim, as you will always need to report and incident. Your broker can advise you about whether you should make a claim or not.
After an accident, you may incur expenses which are not covered by your policy - the cost of hiring a replacement PCO-licensed car, for example, while yours is in the body shop for repair. These expenses can be claimed against a third party - again, your insurance broker will be able to give you all the advice you need.
Alternatively, using some of the accident management companies can take a lot of the legwork out of it for you, allowing you to continue with your business, while they settle the issues on your behalf.
Platinum Assist is a typical example; the company can help you with any situation, from straightforward windscreen claims, to thefts and total loss road traffic incidents - and sort out a PCO licensed car all on your behalf, while also assisting with the completion of necessary forms for the insurer or broker, saving valuable time and making sure the claim is processed immediately.
What happens if my car is stolen?
If your chauffeur vehicle or private hire executive car is stolen, then tell the police immediately, and your insurance broker or company.
According to BIBA, it can take up to six weeks for some insurers to settle any claim for loss, as this allows time for the police to investigate the crime, and hopefully recover the vehicle.
Should your vehicle be found, tell your insurance company and give them precise details of its whereabouts - it might have been damaged, too, so there might be a claim to file to bring the car back up to hire condition.
While it’s inevitable that insurance premiums will rise this year, chauffeurs and private hire drivers and companies can limit their exposure by reviewing their insurance, reviewing the brokers they use, and taking proactive steps to limit their risk. But above all, make sure you have the right insurance for your business - after all, your business future could depend on it.
Useful addresses and companies
British Insurance Brokers Association
www.biba.org.uk
Swinton Insurance
www.swinton.co.uk/car
Towergate Manning
www.towergatesevenoaks.co.uk
Direct Chauffeur Line
www.direct-chauffeur-line.co.uk
QBE Insurance
www.qbeeurope.com/motor/
A-Plan Insurance
www.aplan.co.uk/motor
Platinum Assist
www.platinumassist.co.uk
Taxi Centre Insurance
0141 847 6999
Livingstone Group
0208 903 9519
Giles Insurance
www.gilesinsurance.co.uk
GSI insurance brokers
01933 411888
Accident Assist
0845 163 1111
