Keep abreast of more insurance competition
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John C. Vann advises operators to look at two new commercial vehicle contracts
THIS IS THE AGE of change. In the insurance sphere it is difficult, if not impossible, to keep up with the changes, even for the initiated. There are new policies, revised policies, up-dated conditions and terms, increased premium rates and occasionally reduced rates and so on.
It is, therefore, a worthwhile exercise for those in the haulage and commercial vehicle business in general to try to keep abreast of what goes on — and in particular of any significant changes — in the insurance market. Bearing this theme in mind, perhaps we can look at a couple of fairly new commercial vehicle insurance contracts which have appeared.
One has come from the Sun Alliance, a large, firmly established and well respected insurance group. Not long ago this company increased its maximum goods vehicle no claim bonus to 40 per cent, applying after four claim-free years. Recently its first-year bonus was reduced to 10 per cent. To complete the picture, after two years free of claims the bonus is 25 per cent, while after three years it goes to 30 per cent.
The latest Sun Alliance feature is the introduction of a "stepback" bonus facility. This is rarely encountered in the commercial vehicle insurance field, though it has been popular under private car insurance for many years. What the Sun Alliance step-back feature signifies is that a single fault claim where a policyholder is earning four years' no claim bonus, only reduces the bonus to a still useful 25 per cent. This means that the policyholder steps back only two notches dawn the discount scale and does not therefore forfeit the whole of his maximum no claim bonus.
A premium increase of 71/2 per cent to combat rising costs was imposed by Sun Alliance from October 1, 1981. But to sweeten this pill for many policyholders, certain important district rating changes were brought in. Some commercial vehicle owners will, in fact, be paying less than before, despite the 71/2 per cent in * crelase. The fortunate ones are
those whose area is Peterborough, Plymouth, Durham, East Sussex, Humberside, North Yorkshire, Telford, Suffolk, Clwyd, Gwent {excluding Newport) or Glamorgan.
An accidental damage excess is worthy of consideration. The word "excess" is insurance jargon. It relates to the sum you are prepared to bear out of your own pocket in relation to a relevant claim. For instance, you may be willing to take a £50 accidental damage excess, meaning that you will pay for the first £50 of any damage to your vehicle,
The Sun Alliance gives you a discount of 10 per cent for this. For a £75 excess you get 121/2 per cent discount, while for a £100 excess the discount goes to 15 per cent.
Premiums are far from cheap these days. This has caused the Sun Alliance to allow premium payments to be spread over the full 12 months in equal proportions. Paying on a monthly basis can be very helpful for many hauliers.
A multi-vehicle discount is available. For five or more vehicles insured, the discount is 5 per cent. It all counts!
Where a discount is given for an excess, this is known as a voluntary excess. But there are compulsory excesses and here a discount is not allowed.
The Sun Alliance has amended its compulsory excesses for young and/or inexperienced drivers. Drivers under 21 years of age have to face a compulsory excess for accidental damage of £100. Those drivers aged from 21-24 have to pay the first £50 of any damage. Drivers who have not held a full hgv licence for one year, are called on to pay the first £50 of any damage.
If the number of drivers can be restricted, and named, a discount of up to 15 per cent is possible. So, all in all, quite a few discounts can ae obtained to whittle down the premium. tipping risks, although in respect of own damage "tipping" claims the owner-driver has to bear the So much for the Sun Alliance contract. Attention can now be directed to the other contract, launched by Ernest A. Notcutt & Co, specialist insurance broker to the road transport industry. This is known as the Five Star insurance package for owner drivers and has much to commend it.
In these tough recessionary days, any premium saving is to be welcomed. Notcutt's claim that premium rates under this new policy are around 20 per cent lower than published rates of other insurers who are currently reckoned to be the most competitive in the market.
Further premium reduction is possible in that if use of the insured vehicle is restricted to within 100 miles of the operating base, a discount of 15 per cent can be claimed.
The no-claim bonus scale is attractive, rising to 40 per cent after three claim-free years. The stages are 20, 30 and 40 per cent.
There is good news for new operators taking out their first goods vehicle insurance under this Five Star package. For such drivers, an introductory or starter discount is allowed from the first year's premium, subject to two stipulations. The proposer must be aged 25 or over. Additionally, he must have held for a minimum period of 24 months a full goods carrying vehicle licence for the type of vehicle proposed. A first renewal discount of 30 per cent will then be allowed if no claim arises during the first year.
Even in the best circles, accidents do occasionally occur. In accidents, there is a tendency for other people's property to be damaged or destroyed. However, under this Notcutt policy, third party property damage cover is given up to £1 million.
Automatic cover applies for first £250 in view of the risk involved.
It should be noted that the owner-driver is called on to pay the first £25 of any damage to his vehicle if it is up to 10 tons gvw. If it is over 10 tons gvw, the "excess" figure rises to £50.
However, windscreens are covered up to £150. The excess does not apriily if a windscreen is broken and neither is the noclaim bonus affected by a claim for such an item.
Certain personal benefits are included for the owner driver or a named driver. The cover is personal accident. If death occurs owing to accident or if there is loss or one or more limbs and/or eyes in an accident, a lump sum of £5,000 becomes payable. A similar amount also applies if there is permanent total disablement.
Personal effects of the driver are insured up to a limit of £100 if lost or damaged, subject to a limit of £25 for any single article, such as a watch.
If there is a loss of an hgv licence solely because of accident and/or sickness, a payment of £1,000 is made.
For operators requiring cover for Continental use, rates and terms are given on application to Notcutt's. Several optional extras on offer include goods in transit "all risks" liability, incorporating CMR, vehicle warranty (breakdown) insurance for new and used vehicles, loss of use insurance in the form of compensation for hire purchase payments following accident, and loss of earnings cover following accident or sickness.
Prompt commencement of repairs is promised and credit facilities are available for operators who wish to spread out the premium payments.
If an individual or firm wishes to have further information on either or both of these contracts, the relevant details are: Ernest A. Notcutt & Co Ltd, Mackenzie House, 221-241 Beck= enham Road, Beckenham, Kent BR3 4UB (tel: 01-778 7878).
Sun Alliance Insurance Group, 1 Bartholomew Lane, London EC2N 248 (tel: 01-588 2345) or any branch office.