What to do about Rising Commercial Fleet Insurance Costs

Why are fleet insurance premiums going up? And what can you do about it?

It has never been more costly to run a fleet.

Almost every possible cost that could be rising, is rising for fleet managers. 2023 has seen the highest rise in vehicle costs, from fuel to parts, to stock, to replacement vehicles – fleets are getting more and more expensive to maintain. And it’s had a knock on effect on insurance.

On average, the cost of car insurance has risen by 17.4% in the past year – according to Insurance Business UK – the significant jump outpaces inflation and is the largest yearly increase for five years. Pair this with the fact that vans and commercially-used vehicles are more expensive to insure than domestic cars, fleet managers will be noticing the strain.

Are electric vehicles the solution to commercial fleet costs?

Many fleet managers are turning to EVs, electric vehicles, as the solution to the recent increase in costs. This is because they offer low running costs and low tax payments. However they are difficult to acquire, expensive, and very slow to repair or replace.

Indeed, unless you have an abundance of cash reserves that you want to spend on your fleet, electric vehicles will not be the correct solution for most fleet managers.

Are grey fleets the solution to commercial fleet costs?

Businesses are also warming to the idea of a “grey fleet”. A grey fleet is where a company utilises the private cars of employees for business use. When the nature of work means low mileage, this option is ideal, however the standard of the fleet is much harder to manage and maintain.

Driver self risk-assessments, mileage tracking and vehicle checks are important policies to include when allowing staff to use their own cars on the job. This is especially true when it comes to preventing accidents, as your business may be liable should this happen. A grey fleet is often more cost-effective, but companies can find themselves overpaying on mileage for an employee’s non-business-related journey.

How to Educate on Good Driver Practice?

We cannot get away from the fact that maintaining a fleet is a considerable expense for any business. How high the costs can largely depend upon the driving habits, care and awareness of your drivers. Fleet managers can save as much as 15% of their spending by having a diligent driver-force – according to the Energy Savings Trust.

You can encourage fuel efficiency by outlining and educating on fuel saving practices. A better use of gears is essential, keeping revs low and changing below 2000 rpm rather than 3000 rpm. Telling your drivers to slow down will help improve consumption and pollution. And make sure your drivers know how to tell if their tyres are below the recommended pressure. Air conditioning also has a great effect on fuel consumption, so remind your drivers not to accidentally leave it switched on in the car.”

You can also make a few rules to prevent unnecessary fuel usage; tell your drivers not to leave clutter in their backseat or boot, make sure they anticipate road conditions, for instance, by tracking navigation or checking braking distances through information systems such as the iDrive. Fuelling up at the right places with the best rates should be mandated. Planning the route before hand and ensuring drivers do not detour is also an option. Maintaining a focus on fuel saving is one of the most productive ways of helping your fleet save money.

What are the benefits of using an Account Manager for Fleet Vehicle Costs?

The benefits of using an independent broker – and adopting the services of a dedicated account manager – will be witnessed before and after a claim is made. Independent brokers are on your side, negotiating the appropriate price for your fleet insurance.

Our aim as a dedicated broker is to ensure you receive the right cover with the right terms. To achieve this, we require updated information including past vehicle insurance details, vehicles numbers and driving licenses. Our account manager will liaise with your responsible fleet manager, able to feedback up-to-date information and advice about your cover.

Advice offered by account managers includes reminding the fleet manager of their responsibilties. These are specific to the business, and so could include training, dashcam set up, recording miles, and how to properly carry out vehicle checks. Communicating effectively between broker and client is essential, and it’s why an independent dedicated broker is the correct solution for responsible businesses.

Indeed, the most frequent topic of dialogue between a business and its broker is on fleet cover. The most common fleet issues include outlining policy terms, registering vehicles properly and general bumps and scrapes. Fleet related claims are the most common form of claim, and at Romero Insurance Brokers we aim to resolve them quickly and quietly, minimising business disruption.

Q: 'How can an independent broker help businesses save on fleet costs?'

To get a clear understanding on the importance of using an independent broker, we spoke to Romero Group Broker, Georgia Richmond. Georgia listed the three key reasons why using a broker is essential for fleet managers:

 

“Our in-house claims team is second to none. We have 22 staff ready to resolve your claim at a moment’s notice. They are very experienced and very dependable, there is not a situation they haven’t seen.”

“Appropriate cover is essential. We aim to deliver the right cover for the right premium, only using A-rated insurers wherever possible. For returning customers we always update them on what we are doing to improve their terms. For new clients we will assess their claims history and see if inflated claims reserves are pushing up their premium. Our process is to work with clients to help understand their situation and what would be the best financial solution for them.

“Ask yourself: If you have a fleet of several vehicles, and each is involved in a claim, could you handle several complex claims cases? Could you provide or afford the time each case requires? – Our dedicated account handlers and claims handlers will be on hand, guaranteeing a fast turnaround for you and your business. Romero Insurance Brokers are always on your side; we pride ourselves on our customer service and we understand you have a business to run. That’s why we promise to take care of the full breadth of your fleet insurance, minimising any disruption to your business workflow.”

 

“Fleet insurance can be complicated. Using Romero Insurance Brokers simplifies the whole process so that you can focus on managing your business.”

– Georgia Richmond, Romero Group Broker

 

Contact us now and let us take the wheel

 

For more information, see our document – WHAT IS FLEET INSURANCE AND WHY DO YOU NEED IT? – detailing all the information Fleet managers need about fleet management and insurance.

https://romeroinsurance.co.uk/news/fleet-insurance-whitepaper/

Important Update for Motor & Fleet Policy Holders