A NEW European Union-wide insurance directive obliging companies to keep an exact record of every car driven by their employees under corporate cover could cut firm's insurance premiums by 5%.

The reduction would help offset the huge estimated cost of extra paperwork that fleets fear will flood their offices to meet the new legislation, which comes into force in January 2003.

Currently, fleets can estimate their fleet size and pay a premium based on their claims experience and risk profile.

The new directive ends this practice of blanket corporate insurance policies for motor vehicles in favour of listing every vehicle on the fleet, which must be constantly updated.

The directive even covers demonstrator vehicles and daily rental vehicles driven by employees if the cars are covered by the employer's insurance.

Lex Vehicle Leasing says it is well on the way to becoming compliant with the demands of the new directive, and although it is set to have a major impact on fleet administration, Steve Bolton, Lex Vehicle Leasing's general manager, specialist products, said: 'The changes will also spell the end of the road for the UK's estimated one million plus uninsured drivers. It has been estimated that these drivers cost honest policyholders, both fleet and retail between £20-£30 per vehicle per year. For fleets paying thousands of pounds each year in premiums, a 5% reduction in their insurance costs is predicted within a couple of years.'

Lex Vehicle Leasing is encouraging fleets to support the directive, and along with other leasing firms, it is providing guidance for companies.

Meanwhile, Alphabet has launched an online guide to the directive, explaining what it means to fleets and the action they can take to cope with potential changes. The guide can be accessed through its website at www.alphabet.com/intelligence.

  • Details of the changes are available on the Motor Insurers' Information Centre website, at www.miic.org.uk/phase2/policyholder/

    Fact file

    The European Union's Fourth Motor Insurance Directive will come into effect in January 2003. In the UK, vehicle registration numbers and insurance details are to be held on a Motor Insurance Database (MID), which is operated by the Motor Insurers' Information Centre (MIIC), a body set up by the insurance industry to manage the data collection process.
    By the end of December 2002, insurers will require fleets to:
    (a) Check that their current policy(ies) have been recorded on the MID by their insurer or broker.
    (b) Ensure that details of every vehicle covered by each policy have been entered on the MID.

  • Source: Alphabet