How to cut the cost of a claim
Six steps to keeping EV insurance bills under control. By Peter Milchard, board member, Association of Fleet Professionals
One of the unwelcome effects of fleet electrification has been an accompanying rise in insurance premiums. Members of the Association of Fleet Professionals (AFP) have reported often eye-watering increases in the last few years – and the issue is persisting.
Why is this trend happening? The insurance industry relies heavily on long-term historical data to assess risks and because of the relatively recent emergence of electric vehicles, there’s a lack of relevant information. Also, the data that is available shows an unfairly high incidence of challenges, such as limited availability of parts and bodyshops, a shortage of technicians and high replacement hire costs. All of these factors have resulted in many EVs involved in accidents simply being written off.
However, fleet operators are not helpless in this scenario. Where AFP members have taken proactive measures to minimise claims and manage risks effectively, increases have been minimised and, in some cases, premiums have even been held. To avoid any price hikes, you need to show your insurer that you are taking actions that will have a direct impact on your claims rate.
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Where AFP members have taken proactive measures to minimise claims and manage risks effectively, increases have been minimised
Here’s our six-step action plan:
ONE
Create an ongoing dialogue with your insurers. Maintaining an open channel is paramount for understanding and addressing EV-related risks. When you engage with your insurer – and learn what they expect in terms of risk management – you can start to tackle those factors. Also, find out if they’re willing to contribute bursaries towards covering the cost of telematics, dashcams and other risk solutions, which can ultimately reduce premiums. If they don’t offer such incentives, it may be time to consider a review.
TWO
Review and assess your risk management policies. Are they tailored for EVs? If you’re uncertain, seek advice from other fleet operators – potentially within the AFP – or again, talk to your insurance company. However, while it’s important to realise that insurers will stress the importance of recognising the unique risks associated with EVs, they will tend to prioritise fundamental risk management above all else.
THREE
Maximise your accident data. Remember, data is king when it comes to risk management. Take ownership of your incident information and analyse trends – especially, how many claims could have been prevented with proactive driver intervention? This data may be available from your accident management company, but there is much to be said for compiling it yourself. This may require investment but it will ultimately yield returns.
FOUR
Telematics has a part of play. It’s not just accident data that is important. You also need to interrogate your telematics information. Done successfully, this can identify unwelcome trends and address them so that you can engage with your drivers to improve performance.
FIVE
Driver engagement is paramount. Educate your drivers about the true costs of incidents by putting a value on them that they can understand. For example, simply telling employees your average incident claim cost can help to promote understanding of why it is so important to make improvements.
SIX
Evaluate your choice lists and vehicle suitability. Is it wise to assign a high-powered electric car to an inexperienced driver? Consider offering training about the specific characteristics of EVs to help ensure safety and efficiency.
In summary, if you can successfully take control and avoid leaving fleet, risk and accident management to chance, there is a good chance you can escape the escalating EV premiums being seen by many fleets. Following these six steps will set you on the right path but, as ever, we also recommend becoming part of the AFP in order to access the unrivalled advice, expertise and wide-ranging experiences of our members.
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