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Commercial Motor Insurance

The credit crunch may well have caused many prices to fall, mainly because traditional markets have become more difficult to sell to, or have disappeared completely. Business has contracted throughout the country as a result and the haulage industry has suffered more than most as work has dried up and profit margins have come under more and more pressure. This is perhaps not the time for vehicle insurance costs to actually increase but that is what is almost certain to happen as a result of an increase in fraudulent claims, higher compensation payments and a greater level of theft and malicious damage. Commercial vehicle owners have to watch every penny in these difficult times, so vehicle insurance is a ready candidate for going under the microscope. How can the cost of it be reduced?

Firstly I must state the obvious and say that insurance premiums are calculated in accordance with perceived risk. The way to get lower premiums is to decrease that risk, and there are a number of steps that can be taken to achieve this. Theft and vandalism are major concerns and since most of these hazards occur whilst vehicles are unattended some insurance companies will offer reduced quotations if all vehicles are regularly parked up overnight in a secure garage or compound. This latter should be well lit and preferably in a situation from which it can be monitored regularly. Vehicles should be fitted with satellite tracking devices and approved alarm systems, and not only can these measures reduce premiums but in many cases insurance companies insist upon them as an absolute necessity and will not pay out on a claim if the vehicle concerned has not been protected in these ways.

A little more difficult to control is the ages and driving records of the drivers. Insurance companies prefer drivers with clean records of course, and it is a simple matter to make this a condition of employment for new employees, although somewhat more difficult for existing drivers who pick up a few penalty points. Rather more contentious is the issue of the ages of drivers; insurers look upon younger ones as a bad risk generally, and some have an upper age limit as well. Age discrimination is of course illegal in the UK and a fine line has to be drawn between employing the most suitable staff and breaching equality regulations.

Staff training is a potential way of reducing insurance costs if drivers are put through approved safety courses, which will not only give the benefits of a potentially lower accident rate but could also teach the drivers how to use driving techniques which will cause less stress on the vehicles as well as less wear and tear on tyres and braking systems, and lower fuel consumption. A competent specialist broker should be able to discuss suitable training systems with insurers on your behalf.

One way of decreasing premiums generally is to look into the possible advantages of having fleet insurance to cover all vehicles that the company owns, rather than insure them separately. Usually it is not only the lorries, trucks and vans which are covered under these policies but also any company owned saloon cars or even personally owned vehicles belonging to members of staff. Perhaps even the managing director's 200 mph Bentley Continental could be insured at a reasonable price with a policy like this!

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