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Electric Car Guide
Commercial motor insurance continues to rise
A commercial motor insurance policy is designed to protect a business in the event of accident, injury, theft or damages where vehicles are driven for business purposes. The insurance cover chosen will depend on the type of business and who owns the vehicles. Swinton Commercial Motor Trade Insurance, for instance, is aimed at small businesses working in the motor trade.
Over the past 15 years, the number of car crashes resulting in injury has fallen by 30%. Safer roads, one might think, should lead to fewer claims and lower insurance premiums. Yet premiums have gone through the roof and are hitting businesses hard.
The continuing economic crisis isn’t helping. Historically, crime has always risen in tough times. Soaring living costs, rising fuel prices and unemployment seem to have had a knock-on effect on the number of insurance claims.
Stories abound about the proliferation in personal injury claims, namely whiplash. Whiplash claims, of which there are now around 400,000 a year, have risen by a staggering 70% over the past decade, fuelled by the increase in ‘no win no fee’ lawyers.
And then there are the ‘crash for cash’ scams involving the staging of collisions by organised criminals seeking to make fraudulent insurance claims. For every pound an insurance company pays in compensation, it has to pay an additional 86p in legal fees; fees that can only then be recovered through increased premiums.
These higher premiums may have led some individuals and businesses to take the view that they’d be better off taking the risk and not taking out insurance. With more uninsured drivers on the roads, insurance companies are losing out and raising premiums still further.
The advent of insurance websites has created a highly competitive market, whereby insurers vying for market share have been happy to cut their rates for the same amount of risk. The reality is that claims all come from the same insurance coffers. Most businesses should still be able to secure commercial insurance with little difficulty. However, the types of business which are considered high risk, such as taxis and self drive hire fleets, which may have lodged a higher than normal number of claims in the past, may struggle. Some insurers have withdrawn from these markets, creating tougher market conditions and higher prices. A new business, or one that is perceived as being at greater risk of making frequent claims, may also find it more difficult to find an insurance policy than it would have done previously.
Despite these difficult economic times, businesses employing people to drive vehicles are being urged to make sure they’re protected from the unexpected by taking out commercial motor insurance cover. A small business requiring insurance for driving or moving vehicles, for trades such as repairs, maintenance or sales, or public liability cover, should consult a motor trade insurance broker who will fully understand the needs of the business and its employees and arrange a tailored insurance policy.
- Paul Clarke