Just like many things at the moment, insurance prices have been creeping up, including fleet insurance. Last year it was estimated that motor premiums have risen by 15.7% in the past year. This is especially damaging for a business that has to ensure an entire fleet of vehicles as there’s more to insure.
Luckily, there are a few ways that you can keep your fleet insurance costs down. Here are some simple and easy tips to help make your motor fleet insurance costs as low as possible:
The Ogden Rate
A year ago, most people would have no idea what the Odgen rate was. It is one of the technical mechanisms that people generally don’t know about. But that changed on the 20th of March last year when the rate was changed to minus 0.75% which is a big difference to the 2.5% it originally was.
This sent insurance premiums sky high. This is because the Odgen rate makes an impact on personal injury claims, that come most commonly from motor accidents.
The government revealed that the number of people getting killed or injured on Britain’s roads had risen by 6%. Insurance companies felt like they had to protect themselves against the long-term costs that injury compensation would bring. Although this is impossible to avoid, providing safe driving data brought through telematics will demonstrate a lower level of risk which in turn will allow insurers to offer cheaper fleet insurance quotes.
Insurance Premium tax
The IPT was introduced in 1994 and was the government’s way of taxing insurance services. It started off at just 2.5% but carried on increasing over the years. By 2015 it was 6% and after then it began to rocket. Then-chancellor George Osbourne hiked the rates right up to 9.5% and it is now sitting at 12%, with many predicting the government that is tax hungry will continue to increase it even more.
Again this is unavoidable, but getting a fleet insurance quote before November will save you money if they decide to increase the rate again.
2.9% inflation might not seem like too much for some, but it has now hit a four year high with economist predicting that it will hit 3.5% by the end of 2018 and with Brexit now in the mix combined with the devaluation of the sterling, imports have become more expensive leading to knock on effects all around the UK, even increasing insurance premiums in the process.
This may mean that it would be beneficial to look at getting an early renewal for your motor fleet insurance.
Brexit is going to affect almost everything. It has been giving insurance a sense of financial uncertainty which is pushing up their premiums. This is another reason to look at an early renewal.
How to beat the insurance price hikes:
- Use an insurance broker
- Install a telematics system
- Consider who you have driven in your fleet carefully
- Invest in driver training
- Renew your policy early
We can’t always predict what is going to happen with insurance rates, but keeping an eye on the rates and the factors above will give us a clue to what is likely to happen.