Tips to lower your fleet insurance premiums

Managing costs is crucial for the success of any fleet operation. One of the leading factors that affects fleet insurance premiums is the number of claims made. By understanding and actively working to reduce the claims cost per vehicle (CCPV), fleet owners can save money and improve claims management. In this article, we will explore some simple tips to help fleet owners lower their claims cost per vehicle and optimise their insurance premiums.

How does your claims cost per vehicle (CCPV) affect your fleet insurance premium?

When your fleet vehicles are involved in accidents and insurance claims are made, it can raise a red flag to insurers. Too many claims, high severity claims, large scale attritional losses can all result in higher premiums. Insurers consider your claims history and your claims cost per vehicle (CCPV) when pricing insurance for your entire fleet. A lower CCPV means a better premium.

In simple mathematical terms your CCPV is calculated by:

Total claims paid and outstanding / number of vehicles or vehicle years
(for a given period – for example 3 years.)  

Now, this is where it gets a little technical, so bear with us.

Let’s say the above calculation gives you a CCPV of £2,500. How much is your fleet actually worth in insurance premium? Well to work this out take the CPPV and apply the following calculation:

 £2,500 (the CCPV) x 100/55

 This gives us a rate per vehicle of £4,545.45. We then multiply this by the number of vehicles, say you have 50. That will give you £227,272 – and that is your premium.

 Now the thing to note here is that the ‘55’ is a market variable figure that represents whether we’re in a ‘soft’ or ‘hard’ insurance market. In a softer insurance market the formula might be 100/60 or even 100/65.

Whilst a number of factors can affect your premium, getting your CCPV (in this example £2,500) lower will result in a lower premium.

Tips to lower your claims cost per vehicle

• Driver training: Invest in driver training programs to reduce the risk of accidents and claims. By providing regular refresher courses you can reinforce good driving habits, including defensive driving techniques, as well as providing reminders on road safety, and traffic rules to minimise accidents.
• Fleet safety policies: Establish and enforce safety policies that promote a safety-first culture to reduce risks and prevent accidents.
• Regular vehicle maintenance: Implement a maintenance schedule for inspections, oil changes, tire rotations, and brake checks to reduce breakdowns, costly repairs, and accidents caused by mechanical failures.
• Telematics technology: Use telematics technology to monitor driver behaviour and vehicle performance to provide training where necessary and proactively reduce accidents.
• Safety audits: Conduct regular fleet safety audits to identify potential hazards, review incident reports, and address any gaps in training or policies to continuously improve safety measures to minimise accidents.
• Safety equipment & camera systems – utilising the additional support of camera systems and vehicle tracking, alongside your telematics technology allows risks to be investigated and identified ahead of time. Allowing for predictive risk analysis and supporting your business. It also sits a positive training tool to support driver behaviour improvement through mentoring and supportive investigations and conversations.

If you are interested in investigating your claims cost per vehicle and seeing if we can potentially reduce your insurance premium, get in touch or call the team on 01743 360545.