How Usage-Based Insurance Is Fairer For Smaller Businesses
Do you often find your fleet getting poor, expensive quotes for insurance? New industry analysis would show that youâ€™re not alone, with many smaller fleet owners and individuals frustrated at the reductions afforded to larger businesses â€“ benefits given because of the inevitably larger premiums theyâ€™ll pay.
US-based news site Driverâ€™s Alert recently published a piece slamming insurers for preferential treatment of bigger businesses, and leaving smaller firms in the middle getting poorer deals on their fleet insurance. Their analysis is thorough, and well worth a read â€“ our latest article here at Nash Warren runs through why insurance companies and fleets of all sizes could be better off with usage-based insurance.
Why Big Business Gets Preference
Firstly, itâ€™s important to understand just why it is that much larger corporations with bigger fleets appear to have had, historically, preferential treatment from insurers. There are a number of factors that come into play with this:
â€¢ Large companies can pay higher value excess which absorbs some cost of claims
â€¢ Insurers like to â€˜boastâ€™ big-name clients, so offer discounts to get them on board
â€¢ Investment in fleets means more reliable vehicles and more comprehensively trained drivers.
How Usage-Based Policies Work Effectively
Usage-based policies are nothing particularly new, but are being used increasingly by smaller businesses and fleets which otherwise miss out on the savings, discounts and preferential treatment afforded to much larger organisations. Effectively, itâ€™s the most fair and accurate way for insurers to assess the â€˜riskâ€™ a particular vehicle or set of vehicles represent â€“ based on actual, specific statistics on how, when and where vehicles are being driven. The following data is collected using a â€˜black boxâ€™ telematics system:
â€¢ How vehicles are being driven (stopping times, acceleration, speed etc.)
â€¢ What times of the day, week or year vehicles are driven
â€¢ Where and which areas vehicles are driven in
The Driverâ€™s Alert post suggests that usage-based predictions are 200% more accurate in their predictions and assessments of risk than existing practices might be. Itâ€™s also much fairer on drivers who exhibit low-risk behaviour, with much more accurate predictions. Ultimately,
Here at Nash Warren, we pride ourselves on being able to provide a comprehensive range of insurance policies and options for fleets of any size and virtually and type of vehicle. Contact us today for a quote or for more details about whether we can cover your vehicles.