Vehicle insurance is often a grudge purchase – until something goes wrong. Here’s how you can pay less.
Nobody gets excited about paying for insurance, but with vehicle-related expenses constantly climbing, few companies can afford the risk of running a fleet without some form of insurance. Insurance needs vary, depending on the size and purpose of the fleet, but in most cases, there are certain steps companies can take to help keep insurance costs as low as possible.
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Research and Compare
This may sound like a very obvious point to make, but many companies end up paying far too much on insurance simply because they didn’t do enough research. Finance departments often have preferred suppliers, but there’s no place for loyalty when it comes to insurance. Insurance is a crazy competitive industry that always changes, so companies need to research and negotiate when shopping for insurance. Make sure you aren’t paying for unnecessary benefits that can cost you a small fortune every year.
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Carefully consider your claims
It’s common practice that customers with a high claim record pay higher premiums. Fleet managers should carefully weigh the cost of claiming (risking higher premiums), or paying for certain repairs without submitting a claim. This is one area where professional fleet companies really earn their keep as most will have agreements in place with manufacturers or workshops to do smaller repairs at reduced rates. They save their clients money by reducing the number of insurance claims and ensuring repairs are done according to industry standards at greatly reduced costs.
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Technology
According to an article on Carinfo.co.za, security and anti-theft measures is one of the top ways to reduce insurance premiums. Most insurance companies reward clients who install anti-theft technology by lowering their monthly payments. When you’re shopping for fleet insurance, make sure you get the detail of precisely what type of anti-theft technology your insurance company covers. Not all insurance companies have the same requirements and you want to make sure you either install the correct hardware / opt for an insurance company that recognises your existing anti-theft technology. Many fleets don’t install separate anti-theft technology, but rather incorporate it into their telematics systems, so read the fine print and make sure your insurance company is aware of, and understands, all the safety measures that are incorporated into your vehicles.
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Driver Training and Driver Records
When it comes to personal vehicle insurance, attending advanced driving courses is one way to lower your premiums. With large fleets that employ many drivers this becomes more difficult, but it does make a difference in the long run. Companies that can prove all their drivers have received advanced driver training – and have impeccable driving records – can negotiate reduced rates for the company as a whole. And even if it doesn’t secure lower premiums off the bat, making sure your drivers are well trained will mean fewer accident / damage claims, which will make your company eligible for lower premiums.
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Vehicle make & type
Clever fleet managers will study annual reports of the most hijacked and stolen vehicles in South Africa (going back a number of years) and identify which manufacturers are the higher risk. They will also consult various insurance companies to find out which brands currently carry the highest premiums. By avoiding these brands (if possible) fleet managers can lower the risk profile of the entire fleet and also secure reduced premiums.
Most companies won’t be able to tick all the boxes for lower premiums, but if you could work two or more of these steps into your fleet operations, you could see some generous savings on insurance. Fleet managers who stay on top of insurance trends and requirements can keep their fleets ‘insurance-friendly’ and keep the cost of premiums to a minimum.
*Eqstra Financial Services Pty Ltd (EFS), FSP 46229, is a cell captive administrator and a non-mandated intermediary that undertakes to assist policyholders implement positive steps to lower fleet costs by creating an accident reduction culture.
