Consortium to cover coaches
Page 47
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The disasters of 1975 highlighted the coach insurance market's weakness, and many firms found their premiums doubled within a year. John C. Vann reports on several new schemes for coaching cover.
NEW INSURANCE schemes in any way connected with vehicles are usually worth a look-over. Recently a new personal accident insurance scheme was introduced to provide automatic protection For passengers and drivers of :oaches. It is available for the UK and Europe generally, but bodily injury arising out of the use of any coach requiring a stage or express licence within the meaning of the Road Traffic Act is excluded.
Capital benefits are given. £3,000 is payable if death oc purs within 12 months of an accident. This amount is also payable for loss of, or loss of use 3f, a limb or an eye within a year Df an accident — or if permanent total disablement results. This benefit will be paid following njury caused while entering, travelling in or alighting from a
3oach. The death benefit is -educed to £500 for persons .mder 16 years or age. The pre-nium is £20 per coach per an
i urn . • It should be stressed that personal accident benefits are payable in the event of a legitimate claim irrespective of legal liability. Of course, pay -nent under any personal accident insurance in no way Prevents a claim being submit ted if there is alleged iegligence. For instance, if a passenger is injured in a coach accident, he can put in a claim For damages against the coach 3wner, although he may have received or be due to receive Payment under a personal accident insurance policy.
Another scheme, introduced 3 few months ago, is worthy of onsideration. It is for coach and our operators, who can take advantage of a low-cost insurance scheme covering against breakdown through accidental Jamage or mechanical failure an the Continent. This scheme las been set up with the assist ance and approval of the :oaching and Independent Bus sector of the Confederation of British Road Passenger Transport.
This contract is, in effect, an additional expenses insurance under which overnight accommodation costs are paid up to £15 per passenger (£855 maximum per trip — representing 57 seats) and also the cost of hiring alternative transport up to £200 Per day for a period not ex:teeding three days for each trip.
As a result of mechanical failure only, the insurers will pay, in addition, the cost of transporting spare parts, up to a maximum of £350 for each trip. Following mechanical failure, they will also pay the cost of repatriating the coach to the United Kingdom in the event of non-repair, up to a maximum of £800 to recover each disabled vehicle.
This contract is only available for coaches up to five years old and is subject to the vehicle having been properly serviced in the 14 days prior to departure. The cost for all European countries, including Yugoslavia but excluding the Communist bloc, is £2.50 per coach per day. The charge rises to £3 per day if all the Communist bloc is included. A minimum charge of £25 per journey applies.
Both these schemes have been devised by and marketed through a firm of insurance brokers, Stewart Wrightson (East Midlands) Ltd, 60 Charles Street, Leicester (telt 0533 29881). This firm is a member of the well-known Stewart Wrightson international insurance broking group.
Yet a further new insurance scheme has recently been launched. This should be attractive to coach operators as it is in respect of normal basic coach insurance.
Over the past three years or so, coach operators have been faced with a narrowing insurance market and rocketing premiums. Unfortunately, 1975 brought a series of major accidents involving coaches and the death of 46 passengers hit insurers hard One leading insurance company almost immediately withdrew from the coach insurance market. This action had the effect of a large volume of coach business being dumped at the doors' of other insurers. Of these, several followed suit by either refusing new business or withdrawing from the market altogether. Inevitably, the few remaining coach insurers increased premium rates in an effort to stem the flow of new enquiries and to maintain a balanced portfolio of risks.
The catastrophe claims of 1975 highlighted the insurance market's weakness: premiums had not kept pace with rising costs. For instance, in early 1975 it was possible to insure a 50-seater coach worth El 5,000 for roughly the same premium as a £3,000 saloon car. Insurance underwriters had not been making sufficient provision for potential catastrophes. Linked with the soaring cost of new coaches, the net result was a doubling and in some cases a trebling of coach operators' premiums in the space of only two years.
But now, at last, a new coach insurance scheme has emerged. following approaches made to leading Lloyd's motor underwriters by a firm of London insurance brokers, R. L. Davison & Co Ltd. These brokers have an impressive track record in the commercial vehicle insurance sector and they were able to formulate a consortium cover placed wholly with Lloyd's motor underwriters.
What the consortium approach means is that the in surance risk is spread amongst a number of underwriters to form a co-insurance pact. This takes care of the catastrophe element.
The adoption of the consortium principle represents a minor breakthrough in the coach insurance market. An additional source of cover is undoubtedly going to give a much-needed fillip to coach operators.
But the brokers add a warning. They are not intent on turning the market upside-down by offering very low premium rates which would prejudice what is already a sensitive market. However, the brokers do say that those coach operators who have suffered substantial premium increases over recent years should most certainly see an improvement as compared with their current premiums. It is claimed that this new scheme offers a competitive source of cover for coach operators running domestically and to the Continent.
Further details are obtainable from the insurance brokers mentioned at 1 Devonshire Square, London EC2 (tel: 01247 9941).