Insurance of Commercial Motor Vehicles.
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How to Insure the Goods Conveyed and the Passengers Carried. Responsibility of a Common Carrier that of an Insurer.
1 NSURANCE is, or seould be, inseparable from the use of a motor vehicle of any description. At one time, in my simple faith, I had the idea that, it was so, so real was my belief in the inalienability of the two. A casual question on one occasion discovered for me one case of non-insurance. This surprised me and impelled further investigation, which disclosed to my astonished intelligence that there were considerable ga,ps in the fabric of the unanimity which I had imagined.
I am still of opinion, however, that what I imagined was, should be. I think that every vehicle ought to be insured before it is used, and, although I am far from advocating State interference with industry in any shape or form, I would not view with any dismay a proposal to make insurance, against third-party risks at least, compulsory, on the ground that a poor man, driving a motor, might do some person an irreparable injury for which he would be totally unable to afford compensation. At any rate, defaulters notwithstanding, there is no doubt. about the importance of insurance to every mptor owner, to whom the following notes and figures ' are addressed as a guide to him, when he is negotiating this matter.
The Three Insurances to be Effected.
There are, three insurances involved, that of the vehicle, of its driver and, where employed, n, loader; and of the load. The first is of direct interest to every reader of this journal. The second is ,a straightforward matter which can be dismissed in few words. The third concerns chiefly the haulage contractor who has certain legal obligations in respect of his load, particularly if he acts as a common carrier, which should have the effect of compelling him to insure against fire, theft, or loss by other means, of the goods which are entrusted to his care.
Insurance offices fall into two main classes, known colloquially as tariff and non-tariff. The former name is applied to those who are members of what is known as the Accident Offices' Association, which exists chiefly to maintain a standard form of policy in conjunction with a regular tariff of premium. Briefly, its object is price maintenance. Non; members of the Association are not bound to adopt either the standard policy or the standard premium. firoin the point of view of the insurer it is important to know. that, as a general rule, the premiums on policies from non-tariff offices are lower than those from tariff offices. The former class of insurance company will, moreover, as a rule, make out policies equal to those offered by the tariff offices. The difference in rates as between the two is generally 'claimed by the non-tariff people to be due to their lower working expenses.
The intending insuser has two things to consider, the price he is going to pay and what he is going to get for his money. His better procedure is to make up his own mind about the latter and get the most favourable terms he can. What the insurer gets is explaissed in the terms of his policy. If he standardizes that himself, on reasonable lines, of course, he can then get to business and place his insurance at the best. competitive rates: Space, or the Jack of it, prevents my presenting here a complete Policy or discussing such a matter at the length which woula be necessary. The motor owner's best method of working is to examine a tariff policy and one or two from non-tariff offices, select the best and add to it. any clauses from the others which it may lack. He can then obtain quotations on the policy as formulated by himself, and he will find considerable variation in the prices at which he can obtain his insurance. Non-tariff companies, at least, would be willing to vary their own policies to meet his requirements and will quote accordingly.
In the accompanying schedule of rates of insurance for . goods-carrying vehicles, three classes are specified. Class 1 is for machines used in large cities like London, Glasgow, and Liverpool. Class 2 refers to localities having populations of from 50,000 to 500,000, and is generally taken to include all the industrial towns 'of Lancashire and Yorkshire. Class 3 is for smaller towns and districts generally. It will be necessary for the individual reader to discover for himself in which category his own home town comes. The two rates specified in each class show the tariff and non-tariff premiums respectively. It is necessary to bear in mind that the tariff rate is fixed in relation to a standard policy. Additional clauses may be obtained at the cost of extra
• premiums. It is not advisable to ask for deductions, as the corresponding sacrifices on the part of the insurer are not, as a rule, worth while. The nontariff rates given are in relation to a. non-tariff policy which may or may not be so good as that offered by the tariff company. Generally, there is not a great deal of difference between the two, but careful comparison is advisable before a decision is made. A non-tariff policy, if below the tariff standard, can be brought up to that standard, sometimes with, and sometimes without, additions to the premiums named in the table. That is a matter for negotiation.
Concessions for the Ownel -driver.
Insurance companies, even members of the A.O.A., are generally prepared to make concessions to the owner of a fleet of vehicles • very often; too, a slight reduction in the premium can 'oe arranged if a good fire extinguisher in regularly carried. An ownerdriver can often obtain special concessions, but he should bear in mind that a policy acquired under that condition, ties him always to drive his own vehicle, otherwise, in the eA7ent o£ an accident occurring on some special occasion when he is not driving, he loses the right to any compensation. As a general rule, it is better not to insure a.commercial vehicle as " owner-driven.'' It is important to note that the rates scheduled are applicable only to vehicles used for collection and delivery of the goods belonging to the Nunes of the insured machine. The motor used for haulage contractors! work of any kind is assessed somewhat higher than this. Passenger-carrying vehicles, naturally, come in a different category, the rate being considerably higher. The classification as regards size is a simple One: a 14-seater being the limiting size of the smaller class ; a similar division of the country into three classes holds good with passenger vehicles as with goods machines. Bates for hired cars are more complex, being determined, as is customary with touring cars, by h.p. and value. As:regards taxicabs, this rate, too, depends on the value, a Beardmore, for example, being insured for 225 per annum. The 'schedules give rates for motor coaches, taxicabs, and hire cars. It should be emphasized that theserates do not cover the risk of accident :to the passenger. _As regards the latter, which are separately tabulated, the premium depends upon the limits of compensation. In the table five scales are named; in the first, a limit of compensation of 2250 for any one passenger and 21,000 total limit for any single accident is fixed. This means that, in the event of a serious smash involving injury to the majority of the p'assengers in the motor coach, or loss of life to but one or may be one or two, the compensation would be totally inadequate. As a matter of fact, the only wise course is to adopt the highest scale.
Combination of Uses—Coach and Lorry.
The requirements of the man who uses his vehicle as a motor coach in summer and as a goods Vehicle in winter are also catered for by some insurance companies. The premium for such use is a compound of the two and may easily mean a saving of 210 a, year, if advantage be taken of it. As an example, take the case of a 28-seater machine in Class 1. The premium as a motor coach would be 249 19s. 9d., which the owner would have to pay did he not take advantage of this special facility. The premium for a goods machine of this size is 228 18s. 3d. The compound premium would be arrive.d at by adding the two (278 18s.) and dividing by, say, two (239 10s.), a saving of 10 guineas. An important point to watch when insuring is the rebate which is allowed by the insurance company in the event of no claim having been made during the previous year of insuranceit is granted as a rule even by a new office when a change is being made, and its incidence should not be overlooked when comparing rates of premiums, as it is not invariably granted.
The employer's liability in respect of his driver may be dealt with in a few words; not that it is unimportant, for it is anything but that, but because it is straightforward and free from complications. The tariff offices have a, standard premium for drivers of all types of vehicles. It is 35s. 5d. per centum on wages. I am inclined to think that this is the best all-round way of dealing with the matter, arid it, would certainly appeal to the man having a number of vehicles of ali sizes and types engaged on various classes of work. He could then move one man to various vehicles without having to consider if his insurance was in order. However, the owner of a single light van may think otherwise, for he can insure his man with a non-tariff office for 25s. On the other hand, the owner of a heavy vehicle who deals with a non-tariff office will have to pay upwards of 30s. per cent, of the man's annual wages, and may even have to pay as much as 45s. per cent., if the work involves much starting and stopping of the vehicle, the driver having to get out and' in each time. Furniture removing is considered by the insurance companies as a typical example of an occupation which is hazardous so far as the driver is concerned.
Where the Haulier Differs.
The haulage contractor has to be considered separately in regard to this matter of insurance. Only as regards the insurance of his driver do the same rates apply, and even then he is not admitted on the lowest scale, his work being regarded as more hazardous to his men and to his machine than that of the ordinary user. As regards the driver, the medium rate between the most favourable and the highest generally applies. As regards his vehicles, an all-round increase of 20 per cent. on non-tariff rates is general—the .tariff offices' increase is not so large.
It is with reference to his liability for the safe custody of the goods which he conveys that we must consider the haulier. Probably few haulage contractors realize, for example, that although their arehiclea are insured the loads are not. The vehicle or its load may catch fire and be burnt to the ground. Ordinary insurance will enable the owner to replace
the vehicle at the expense of the insurance company. Compensation for the load is not afforded. The seriousness of this may best be realized, from the knowledge of the fact that the insurance offices themselves are not anxious for the business. They will accept it, however, at the followinv-rates and subject to the most important condition that in the case of accidental damage there must have been an actual collision of the vehicle or its load with some stationary or moving object. The risk of fire may be covered by the payment of a premium at the rate of is: 6d. per cent, of the value of the load ; that is to say, if the haulier conAidered that the most expensive load he is likely to carry will be worth a total of 2400, he will have to pay a premium of four times is. 6d. or 30s. per annum in order to insure against loss by fire. Accidental damage is more expensive to insure against and is subject to a further restriction besides that already named. The usual rate is 20s. per cent. on the value of the load, and this is commonly quoted by all types of offices, tariff. non-taritl, or Lloyd's. At this rate insurance is effected up to a value of 2250, anything in excess of • 2250 being charged at 12s. 6d. per cent., and anything in excess of 2500 at 10s. per cent. The minimum premium in any case is 21. Where the haulier is willing to bear some small proportion of the lass, as, for example, as shown in one of the accompanying tables, either the first £2 10s. or the first 25, corresponding reductions in the premium are made. These rates are for ordinary goods ; materials more liable to damage, such as furniture, china and so on, are subject to special rates more than double those given. on the previous page, as may be gathered from the table G. In cases, however, where loads of this character have to be carried by the haulier, he should be able to charge sufficient to cover the additional cost of insurance. The same condition as to the insured bearing a proportion of the loss applies in connection with the more hazardous risks.
One.ef the haulier's greatest risks is that of theft of a load or a portion of a load in transit. The insuring of this risk is a matter which very few offices will consider at all. One office I know will quote and they offer to insure against this risk for a mini-. mum premium of 210, for which sum the maximum value of 2500 per load is covered. In this case also, however, the haulier is expected to carry the first 25 of any loss. THE SKOTCH.