Fleet News

Fleets get warning on self-insurance

SELF-insured fleets are on the 'road to nowhere' unless they take drastic action to raise safety levels and driving standards among their drivers, according to GE Capital Fleet Services boss Steve Taylor. The stark warning was made amid claims that fleet operators are trying to combat rising insurance costs by effectively going it alone and insuring themselves.

Many large companies take out insurance with a hefty excess of more than £10,000 which effectively means they pay for any at-fault accidents from their own pocket.

Over the past six months, insurance rates have risen by as much as between 40% and 100%, which has been the spark for many companies to explore the self-insurance route.

But Taylor said: 'Fleets who believe attempting to keep one set of costs down through premiums, may end up having all the savings wiped out by rising repair and administration costs. I am concerned at the current trend, as it is a road to nowhere as far as most fleet operators are concerned.

'Fleets must have the skills and infrastructure in place to deal with the huge costs of repairs, third party claims and other associated expenses that they will meet after road accidents.

'Anyone who feels this is the way to save their organisation money, without considering the downside, is adopting a very dangerous head-in-the-sand attitude, which could cause terminal damage to their finances.'

The answer, he claimed, was for companies either to embark on a strict programme of risk management, working with their insurance companies to reduce premiums by improving claims records, or bring in skilled workers to cut accident levels.

Taylor said: 'What is so wrong with the current situation is that the insurance industry is simply passing the buck to fleet operators. It is not a good state of affairs.'

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee