Fleet Insurance is a multivehicle policy bought by companies to cover all of its vehicles, Policies can be bought for a large number of vehicles, or it can be a small number (minimum of 2 vehicle), you can chose to have all vehicles covered with the same type of cover or a variety, depending on your needs, you can chose from any driver to named drivers and also have the option to add breakdown cover for an additional cost. Having a fleet policy can save you time, money and worry.
- reduces administration
- one renewal date and one insurer
- usually costs less per vehicle in a fleet than insuring each vehicle separately
The Road Traffic Act 1988 is the main legislation relating to compulsory motor insurance in UK. However, the legal minimum cover prescribed by this act is seldom offered by motor insurers.
The main types of cover are:
- Road Traffic Act only (RTA only)
- third party only (TPO)
- third party fire and theft (TPFT)
- comprehensive (Comp).
The law requires all users of motor vehicles to insure their legal liability in respect of injury or damage to third parties. Cover for injuries must be unlimited and for damaging property it must be at least £1m.Compulsory cover also includes the cost of emergency medical treatment and hospital fees plus any legal costs awarded to the injured party.RTA only cover is not generally an option. On rare occasions an insurer may restrict cover to RTA only for say, an individual driver with a very serious motoring offence. There may also be cases where the main liability risk is covered by a public liability (PL) policy and RTA cover is only required on occasions where the vehicle goes on a road.
In addition to Road Traffic Act only cover, a third party only commercial vehicle policy also provides the following protection:
- third party only cover is not restricted to 'on a road' in the same way as RTA only cover. RTA 1988 only requires motor insurance to be in place on a 'road or other public place'. This is not wide enough for most purposes as vehicles and cars can have accidents on private land or in factory premises or yards
- the limit on cover against damage to third party property is often higher than the £1m prescribed by RTA 1988. Limits vary from £1m to £5m but none are as high as the £20 usually provided under private car policies.
- cover for legal costs that are incurred in defending a claim
- cover at the insurers' discretion against costs of legal representation in the defence of any proceedings in a magistrates court, if this relates to an incident which would be covered under the policy and may result in a claim
- cover against costs of defending a charge such as manslaughter or causing death by dangerous driving or the cost of representation at a coroner's inquest following a fatal accident.
Where there is the possibility of a third party claim, it is usually in the insurers' interest to see that the driver is represented in court. This is to make sure the driver does nothing that might prejudice the outcome of a claim made by a third party.
The policy will also provide an indemnity to other persons to protect them against their legal liability to others. For example:
- any driver permitted to drive under the terms of the certificate of motor insurance
- subject to the insurers' agreement, any passenger travelling in or getting into or out of the vehicle
- any person the insured has given permission to use (but not drive) the vehicle for social domestic and pleasure purposes
- any principal whom the policyholder is contractually obliged to indemnify
- the legal personal representatives of anyone entitled to indemnity.
Neither RTA only or third party only cover damage to the vehicle itself.
Third party fire and theft policies include third party only cover and, in addition, damage to the vehicle by fire or theft.
'Fire' is usually defined as; fire, lightning and explosion.
A vehicle may catch fire from a mechanical defect. Other causes are for the fire to have been started maliciously or to have spread from elsewhere.
Vehicles may catch fire after an accident and this damage would also be covered by the policy. Damage caused to the vehicle from the impact of the accident is not covered and these claims can be difficult to settle as they involve separating one type of damage from another.
Where mobile shops are involved, insurers may exclude loss or damage caused by fire if the vehicle is equipped for cooking or heating food or drink.
'Theft' is usually defined as; Theft, attempted theft or the taking away of the vehicle without the owner's consent. This includes damage to the vehicle as a result of theft and complete loss of the vehicle if it is not recovered.
The wording is intended to cover joyriding as this is not within the definition of 'theft' (Theft Act 1968 - 'the intention to permanently deprive the owner of possession of the property'). Even where these words do not appear, many insurers interpret 'theft' as including joyriding. This is not an issue under comprehensive policies as we shall see later.
Theft cover will exclude vehicles 'stolen' by deception, for example, when a fraudulent purchaser hands over a forged banker's draft or cheque which is subsequently dishonoured.
Insurers also exclude theft if the keys to the vehicle have been left in or on the vehicle whilst it is left unattended.
Depending on the type of vehicle, and sometimes the nature of its load, insurers may require approved security devices to be fitted and used for cover to be effective.
Insurers usually apply an excess against theft or attempted theft of, say, £100 or £250.
Comprehensive offers protection against most forms of loss or damage, including fire and theft. It is almost an 'all risks' cover.
The following are examples of cover provided by a comprehensive policy.
This covers the cost of repairing or replacing the vehicle after an accident.
This could be deliberate scratching in a car park, or more serious levels of vandalism.
In both situations above, insurers pay for the repair of the vehicle but if the estimated repair costs exceed the market value of the vehicle, they will consider declaring it a write off and pay the market value of the vehicle.
Where repairs are carried out the insurers will normally pay for any costs to move the vehicle to a repairer and return it to the insured's home address after repairs have been completed.
It is usual among private car insurers to provide new car replacement cover. Effectively, for cars that are less than 12 months old at the time they are lost or written off, the insurers will arrange for a new replacement to be supplied. This is now becoming a regular feature of commercial vehicle policies, especially where small vans are involved.
The cover applies only if the vehicle is a total loss or repairs exceed a specified percentage (usually 60%) of the cost of replacement. The insured has to be the first registered keeper of the vehicle. This extension will not usually apply if the vehicle is subject to a leasing or contract hire agreement where separate replacement arrangements usually apply.
The option only applies where a similar model is available in UK.
Windscreen And Glass
Damaged glass may be replaced or repaired. The cover includes repairing any scratches to the vehicle's bodywork caused as a result of the broken windscreen.
Windscreen cover is subject to a separate excess of usually £60, and claims do not affect no claim discounts. The excess is not applied if the damaged glass is repaired rather than replaced.
Other features of comprehensive commercial vehicle policies may be:
- personal belongings within the vehicle - subject to limits, for example £100 or £250
- personal accident benefits to the driver (and sometimes passengers) - typical limits are £1000 to £5000 for death or loss of limbs or sight
- medical expenses following injury to the occupants of the vehicle- usually with a limit of £100 to £250.
It is now fairly common for policies covering small vans to provide third party attached trailer cover. For larger vehicles trailer cover usually has to be arranged specifically. It is dangerous to assume that one insurer may provide the same trailer cover as another and each policy has to be checked carefully.
Where an insured requires trailer cover, it is important to identify their specific needs, for example;
- third party only attached
- third party only attached and detached
- comprehensive attached
- comprehensive attached and detached
- cover whilst attached to another firm's vehicle
- cover on customers' premises
- cover anywhere in UK, or anywhere in Europe.
- The minimum level of cover required to use a UK vehicle within the EU and other countries that participate in the compulsory insurance arrangements regulated by EU Directives is either:
- the minimum cover required by UK legislation or
- the minimum cover required by the law of the EU country being visited whichever if the greater or
- the minimum cover required by the law of any non-EU participating country which is being visited.
All motor insurance policies issued by UK insurers must provide the minimum cover required by the relevant EU Directives as part of their standard wording. There is no obligation, however, to include any wider foreign use as part of the standard cover and insurers differ in their approach. Typical arrangements are:
- include the minimum cover only and, on request, extend this to the UK level of cover in return for an additional premium, or
- include a period of foreign use cover at the UK level for a specified number of days. Any longer periods would need to be specifically arranged.
In view of the compulsory inclusion of the minimum level of cover in all EU motor insurance policies, Green Cards (International Motor Insurance Certificates) are no longer required for travel within the EU and other participating countries. In practice, the GB plate of the vehicle acts as a Green Card.
The certificate of insurance, which often includes an explanation of cover in several European languages, assists in case of difficulties abroad. A Green Card is still needed for countries outside the EU and participating countries, for example; Russia, Ukraine and Turkey.
This is a standard clause often found in commercial liability policies as well as commercial motor policies. This recognises that many commercial policyholders are more than one party, for example, partners in a business or holding and subsidiary companies. In this clause insurers agree to treat each party as if they were each covered by a separate insurance policy and provide protection for liability of each to the other.
This covers the driver and policyholder against the costs of pursuing a claim, perhaps for injury, against someone else who caused the accident.
Insurers may offer a replacement vehicle for a short period (for example, 24 hours to 7 days) after an accident. This may be included as standard or offered as an optional extra. This would usually only be available on policies covering vans and other small vehicles.
If keys are stolen or lost and the insurers are satisfied that the identity and/or garaging address of the vehicle is known to any person who may have the keys or transmitter, the cover will include the cost of replacing or reprogramming locks.
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