Fleet insurance specialist, McCarron Coates, is warning fleet drivers that the world of fleet claims is in evolution, with the cost of vehicle repairs now outweighing those of personal injury claims for the first time in many years. The shift in balance between the two main components that make up the total claim value is not down to any changes in legislation, such as the 2021 Whiplash Reforms, but due to the soaring cost of vehicle parts and repairs.
These costs are partly driven by difficulties in obtaining parts post-Brexit, whilst repairs costs also have an element of inflation within them due to overall labour shortages.
However, for the most part, it is because there are few simple repairs now, with so many different and interlinked electronic components within vehicles that any reasonably significant prang is likely to see many parts of a vehicle needing to be replaced.
This issue is exacerbated when the vehicle is an electric vehicle. The battery is a hugely expensive part of an EV and any damage to it is likely to result in a large repair bill or even a quick total write-off. The cost of an EV claim is also influenced by repair delays, with an EV repair taking significantly longer to complete than one on a vehicle with an internal combustion engine (ICE). Sometimes, an EV has to be sent to a specialist repair centre, meaning the time off the road – and time during which an expensive hired vehicle might be required – is even longer.
McCarron Coates believes some insurers have not yet been able to accumulate enough knowledge with which to calculate the right level of insurance premium for the EV risk and so are levying extremely high compulsory excesses, of a level of around £1500, rather than the £500 we might expect to traditionally see on a fleet policy.
The insurance broker’s advice to fleet transport operators is to do all they can to manage their risks on the road better, seeking to avoid the accidents that could land their vehicles in the repair cycle, for some time. The focus should be on enhanced driver training, an analysis of individual drivers’ weak points, so that these can be addressed, and on the use of telematics, to help increase driver awareness of the hazards around.
Within van fleets, the fleet operator should be encouraged to find ways to give the driver ownership of their own vehicle, for instance, by accessing better van purchase options, or else offer incentives to drivers, to better protect the vehicle of which they are in charge.
Monitoring systems for driver behaviours should be focused on the speed at which vehicles are being driven. Whilst Covid-19 has led to fewer vehicles being on the road, the value of the claims being experienced is far higher than was the norm pre-Covid, as the accidents are proving more severe. Speed is the major reason for that.
Fleet operators requiring assistance with their risk management have many different options available to them, if they work with McCarron Coates and its team. The broker’s internal claims team is focused on in-depth analysis of claims data, to help clients see the patterns that emerge within accidents and guide them towards practices that can break the chain.