by Roger Van Praet, Joint Managing Director, FUW Insurance Services Ltd
“I value my ‘Protected No Claims Bonus’ but wonder if there is any real advantage to insuring my car and pick-up this way other than including them on an Agricultural Fleet Policy?”
A no-claims bonus (NCB), or no-claims discount, is a count of the number of years in which you haven’t made a claim on that specific vehicle be that your car or commercial vehicle the amount that its worth varies from insurer to insurer, but a NCB of five years or more, for example, is likely to give you a significant discount on the premium.
If you make a claim on your policy where your insurer pays out, you’ll generally lose some, or all, of your no-claims bonus. But if you’re hit by another car and it’s agreed that you weren’t at fault, your insurer may be able to reclaim the pay-out from the other car’s insurer and your NCB may not be affected. In cases where fault can’t be agreed on, insurers may split the cost of the claims and both drivers’ NCB could be affected.
Protecting your NCB allows you to have a certain amount of “at fault” accidents without affecting the bonus. However, you should be aware it’s the discount you’re paying to protect, not the amount of the actual insurance premium. If you do make a claim, it’s likely premiums will rise as a result anyway.
Motor fleet insurance is a type of insurance that covers a fleet of vehicles used for business purposes. It is typically used by companies and business owners that operate a fleet of vehicles and is particularly suited to agricultural vehicle fleets including Cars, pick-ups, Tractors, handlers, ATVs and other Special Types.
Generally, there is no limit on how many vehicles you can insure with fleet insurance, having all the vehicles under one policy with a common renewal date also helps from an administration point of view.
Rather than having no claim bonus on individual vehicles, the insurers allow an overall fleet discount across all the vehicles. Insurers look at the premium they have collected in relation to claim payments and for well-run risk can be offering discounts of 60 per cent plus. Fleet insurance can work well with expanding businesses as additional vehicles automatically benefit from the fleet discount.
One or two minor claims during the insurance year may not have much impact on the premium; however, it is worth bearing in mind that if the overall experience is bad then the fleet discount is likely to reduce and this will impact across the board.
Fleets also tends to be more flexible, especially if there are younger drivers directly associated with the business. A motor fleet policy can start with as little as two vehicles and simply cover all vehicles owned or leased by the policyholder under one annually renewable policy.
Cover is always generous and invariably exceeds that which a single policy offers. Agricultural Fleet policies include cover for trailers and implements whilst attached or detached, dependent on circumstances of course, but the premium for a motor fleet can work out considerably cheaper than insuring the vehicles separately.
The flexibility of a fleet policy makes it easy to add a temporary additional vehicle to the policy which would be difficult if not impossible to insure on its own. For example, a seasonal vehicle that needed cover when hired in.
Permanent additions to your fleet policy will attract the overall policy discount from inception being a very cost-effective way to manage a growing fleet.
On a possible downside, a poorly performing fleet with many claims, will have a reducing discount or even a loading that will be reflected in increased premiums. Vehicles do not earn individual No Claims Bonus but in the event of you considering insuring elsewhere the insurer will release a confirmed fleet claims
experience usually for the previous four years.
In summary, your No Claims Bonus Policy is for your single private cars;
A Fleet policy provides a more flexible and cost-effective way to insure your agricultural fleet.
For further advice contact your FUW Insurance Services Account Executive.