Soaring prices of parts and replacement hire cars have driven up the cost of insurance claims for everyone, so it is understandable that owners might try to save money by opting for a cheaper taxi fleet insurance renewal.
But focusing just on how much they can save can be a major mistake for fleet owners and could cost them more in the long run.
Claims experience document
While it might work out cheaper for drivers to shop around for private car insurance, Patons Insurance Fleet Account Manager Stephen Shearer explained that when it comes to taxis, insurers look at the bigger picture – and every detail of it.
Stephen said: “The big factor when it comes to renewals is the claims experience document – the equivalent of a no-claims bonus for private motorists. This includes the number of vehicles insured, the number of claims, as well as the value of the claims and insurers will look at the previous three years before they offer a quote.
“They also look at the area drivers work in – whether it is rural or a town or city – and the driver pool, including the ages and experience of the drivers and their claims history.”
Loyalty
While making fewer claims often leads to lower premiums, there are other factors that insurers consider when setting premiums for a taxi fleet – and there is a noticeable move by insurers to reward those who stay with them.
Stephen said: “Insurance companies reward loyalty. A fleet owner might go two years without making a claim, but then have a bad year and make several claims in the third year. If they have been with the same insurance company, they will work with them and can see that it balances out, but if the owner has shopped around every year for the cheapest quote, they are going into a new policy with all those claims in their most recent history.
“An owner might save a few pounds on their renewal by switching each year, but that will be quickly swallowed up by rising costs or if they make a claim.”
Risk management
There is another step Stephen recommends to fleet owners.
He said: “Whatever the claims experience document shows, it is important that fleet owners work proactively with their insurers. If they have one driver who has had several claims against them, an owner can try to mitigate higher fleet insurance premiums by increasing the voluntary excess they have to pay for another claim by that driver or improve their training to reduce future claims.”
By demonstrating that they understand the risk posed by each driver and the area they work in, and by taking steps to reduce it, owners are more likely to be looked on favourably by their insurers.
Stephen said: “The big factors that can reduce taxi fleet insurance premiums are loyalty, being proactive with drivers involved in multiple claims, and risk management. The more you demonstrate you are taking steps to reduce the risk of further claims – such as fitting dash-cams or introducing driver training – the more chance your insurer will reflect that in your premiums.”
No one wants to pay more for their taxi fleet insurance, but it is important that premiums reflect the risk they represent. The best way to keep premiums as low as possible is to try to stay with the same insurer and to be proactive with risk management.
