Five reasons your fleet insurance might be invalid

Fleet insurance can cost you valuable time and money and like most insurances, is required by law. It’s there to protect you from loss in the case of an incident. Or at least it should be.

Unfortunately, that is not always the case, because it is all too easy to overlook fleet and driver management issues that can invalidate fleet insurance cover. This in turn could lead your insurer to refuse to pay out for claims or even cancel your policy altogether.

Here are five common issues that are easily addressed, but which could leave you without insurance protection when you need it most if they are overlooked.

1) Where are your fleet vehicles registered?

Fleet insurance premiums can vary depending on the postcode where the vehicles are registered. This is driven by a number of factors such as local crime rates and flood risks for example.

To get around this, some businesses insure their fleets at an address that is different to where their vehicles are kept overnight. Similarly, an employee might keep a fleet vehicle at their home address overnight instead of returning it to a depot at the end of each day.

However, if one of your vehicles is broken into at an address that is not registered on your policy, your insurer could reject your claim. Especially given that many insurance companies employ specialists dedicated to checking these kinds of details as part of the claims process.

In the worst-case scenario, insuring your fleet at the wrong address could leave you without a vehicle and out of pocket, so take the time to check that your fleet’s registered location is accurate and that vehicles are stored there overnight.

2) Have you modified your fleet vehicles?

Fleet modifications can affect your insurance premium by increasing the value of your vehicles, which could leave your fleet under-insured if you do not also modify your insurance cover.

What’s more, modifications can increase risk by making your vehicles more attractive to thieves or increasing the likelihood they will be involved in accidents.

But what constitutes a modification? The truth is that even simple changes like applying stickers, installing tinted windows, and fitting new wheels can be viewed as modifications, as can more significant changes like custom paint jobs or installing new alarm systems.

Any and all of these changes and more can affect your fleet insurance premium and, in turn leave your fleet under-insured. So, if you undertake any modifications to your fleet vehicles, even if they seem minor to you, informing your insurer should always be part of the process.

3) Are your employees informing your insurance company about minor accidents?

Whether it’s clipping a wing mirror or a small bump, your employees need to tell your insurance provider of any damage to your fleet vehicles. Even if you don’t intend to make a claim.

If the other party involved changes their mind and decides to claim, it is important that any related damage to your fleet vehicle has been accurately accounted for. Should it turn out that the damage is inconsistent with what has reported as part of a claim process, your claim could be denied.

Ensuring timely and accurate disclosure of even minor incidents is vital, even if you don’t plan to make a claim under your fleet insurance policy. Remember that this disclosure also applies to incidents involving employees in their private vehicles.

4) Are you regularly checking your employee’s documentation?

Checking drivers are licensed and eligible to drive your fleet vehicles is key to maintaining valid fleet insurance. This means regularly checking your employees’ driving documentation.

It may seem obvious, but licences and eligibility can change quickly over time. Whether that’s new conviction and penalty points being added, licences for different vehicle classes expiring, or even employees having insurance on their personal vehicles refused or cancelled. All these factors can affect a driver’s risk profile, and if those changes are not reflected in your insurance arrangements, they could again invalidate your fleet cover.

In fact, these kinds of issues are surprisingly common. Research from the AA found that 1 and 650 drivers are driving while disqualified and 1 in 300 are doing so with a revoked or expired licence.

Issues like driving convictions are material facts and must be disclosed to your insurer, as failure to do so may invalidate the policy in the event of a claim. So, to protect yourself and your business from heightened fleet risk, it’s important to have the correct systems in place. Not just to not ensure checks are conducted frequently but also to make sure that the facts are properly recorded and acted upon if required.

5) What are you using your fleet vehicles for?

The type of fleet insurance you need depends on the types of vehicles you operate and how they are used. That means considering all the things your vehicles will be used for, as this may well affect the type of insurance you require. Taking out the wrong type of cover could mean your drivers are working uninsured.

For example:

• A taxi fleet you will need either public or private hire insurance.
• Coach and bus fleets services must have private hire and hire and reward cover in place – otherwise your vehicles may not be covered whilst carrying passengers.
• Business vehicles used to carry goods will either need ‘carriage of own goods’ to cover tradesman’s tools or cover for company products being transported.
• Haulage insurance is a must for businesses offering long distance hire and reward services.
• Courier van insurance is the correct type of fleet insurance for local multi-drop hire and reward services.

In addition, if any of your fleet needs insurance cover for European travel you must notify your insurer before departure in order to secure the right coverage and documentation. Again, driving in Europe without your insurer’s knowledge could leave you without cover for your vehicles.

Finally, it is the nature of fleets that vehicles come and go over time as older vehicles are retired or moved on and replaced. It goes without saying that these changes must be reflected in your fleet insurance policy if it is to remain valid and protect your fleet when you need it most.

<sup>Sources:
1. https://www.agilityfleet.com/the-importance-of-driver-licence-checks/</sup>