Feature business practice | PPC90 March 2018

 

Content and Communications Officer, Scott Johnstone, teamed up with Stephen Hughes from Bradshaw Bennett to get some tips together for PPC readers. 

It’s probably one of your more substantial monthly expenditures – your company vehicle insurance. We wanted to find out why the costs are so high and work out if there’s any way to reduce your premiums.

It’s one of the costs that you see on your bank statement every month and potentially feel you have no control over. Let’s be fair – you’re not going to be buying every technician a bus pass anytime soon. Before you cough up for your commercial vehicle insurance, we thought we’d have a look at what affects the price of your premiums so that you can get in the driver’s seat for your pest control van insurance.

There are several factors which determine the level of premiums charged by insurers for van insurance. We’ll take a look at them in turn.

The vehicle itself

There are practical things that you can do with your van to reduce the premiums.

There are some things you won’t be in a position to change unless you’re looking at getting a new van, in which case lucky you! Take particular note of this section before you sign on the dotted line.

Location

Where the vehicle is kept overnight can impact on premiums. For example, if the vehicle is kept inside rather than on a drive or roadside.

The size of vehicle

Larger vehicles attract higher premiums. Both the engine size and the physical size of the van get taken into consideration by insurers. The logic is the bigger and more powerful the van, the more damage you can do.

If you can get away with a smaller vehicle, your premiums should be lower.

The people that drive it

Again, these are the things you might not be able to change, however, it’s worth understanding precisely what insurers are looking at when you give them your named drivers.

Modifications

Just like your car, if a van's modified or the performance of the vehicle enhanced, your premiums could rise.

Always declare your modifications to your insurer; otherwise, you could end up learning your insurance is invalid when you need it the most.

Age

The age of drivers will be a significant factor, and young drivers will attract a high level of premium. Older drivers without driving experience would also be subject to increased premiums.

Please do bear in mind that it is illegal to discriminate against someone because of their age during the hiring process. It’s never acceptable to ask someone in a job interview how old they are (see our article in PPC89 about recruiting a pest technician).

Mileage

It stands to reason that the more you use your van, the more likely you are to make a claim.

With some insurers, the estimated annual mileage can affect the premium. Therefore it’s wise to keep accurate records and tell your insurer your exact mileage. You could be unknowingly overestimating your miles-per-year and thus be running up the costs.

Convictions

Unspent convictions or serious convictions could affect your premiums. Spent convictions will not alter your insurance (you do not have to declare these at all).

Security

Some insurers may offer reduced premiums if the security on the vehicle has been enhanced. Ask your insurer if adding a steering lock, immobiliser, alarm or tracker will decrease your premiums.

Medical conditions

If there are any medical conditions which have to be notified to the DVLA, this may also affect your premium. You can see a full list of the medical conditions at gov.uk/health-conditions-and-driving

You can be fined up to £1,000 if you don’t tell DVLA about a medical condition that affects your driving.

The claims you’ve made in the past

This one’s pretty simple. You have two things to think about here:

• Individual vans are rated on a no claims discount basis. Insurers allow a discount on the basis of how many years no claims discount is available
• If an additional vehicle is purchased which does not have a no claims discount, the premium will be higher until that vehicle has also earned its own no claims discount.

Don’t think you’re getting your no claims discount? Challenge your insurer before you renew.

Where you work

OK - in reality, you’re not going to pack up shop and move elsewhere just because your van insurance is too expensive.

But if you’re thinking of growing your business or opening up another branch, it might be worth seriously considering how expensive vehicle insurance might be. For example, getting your vehicle insured in Truro, Cornwall is less than half the price of insuring it in inner-city Manchester on average, according to a study by MoneySuperMarket.

Certain areas (like inner cities) attract higher premiums. Urban hotspots like London, Birmingham and Manchester are densely populated, therefore crime rates will naturally be higher than say, rural Scotland.

Cheapest UK areas for car insurance

Average lowest quote	Postcode	Postal area
£355.72	TR1	Truro, Cornwall
£374.99	KY12	Dunfermline, Scotland
£379.26	KY6	Glenrothes, Scotland
£379.69	DD5	Dundee, Scotland
£381.50	AB15	Aberdeen, Scotland
£382.76	IP33	Bury St Edmunds, Suffolk
£383.33	FK3	Grangemouth, Scotland
£384.75	IV30	Elgin, Scotland
£385.68	TR18	Penzance, Cornwall
£386.13	DD2	Dundee, Scotland

Most expensive UK areas

Average lowest quote	Postcode	Postal area
£873.45	M13	Ardwick / Longsight / Chortlon-on-Medlock, Manchester
£839.87	B10	Small Heath, Birmingham
£821.12	M8	Crumpsall / Cheetham Hill, Manchester
£819.93	L7	Edge Hill / Fairfield / Kensington, Liverpool
£818.79	BD8	Girlington / Manningham / Lower Grange, Bradford
£818.59	B11	Sparkhill / Tyseley, Birmingham
£814.04	B12	Balsall Heath, Birmingham
£809.72	B8	Washwood Heath / Ward End / Saltley, Birmingham
£808.58	E12	Manor Park, London
£805.20	BT12	Falls, Belfast, Northern Ireland

Quotes based on a total sample size of 988,742, taken between September 2008 and August 2009.

Figures courtesy of MoneySuperMarket.com

Drive down the cost of your insurance

Unfortunately, insurers generally use the same rating factors for determining van premiums, and there are only a limited number of ways to reduce premiums.
These are the things you can try:

• Reduce cover from comprehensive cover to third party fire and theft. The savings will depend on the value of the vehicle. If the vehicle is leased it's likely that comprehensive cover will be required
• Offer to increase your voluntary excess for damage to your vehicle
• Restrict driving to named drivers only 
• Ask if installing some security feature on the van would reduce the costs.

And before you renew your insurance do some shopping around. If you present a more competitive quote to your existing supplier, there’s a really good chance they’ll try and beat it.

What about fleet insurance?

Insurers will offer fleet insurance where a company has some vehicles. While fleets are available for businesses with at least three vehicles, the benefits are greater for larger numbers of vehicles.
The main benefits of fleet insurance include:

• Instead of an individual no claims discount on each vehicle, a fleet attracts an overall fleet discount. This means new vehicles automatically enjoy the benefit of the fleet discount
• Certificates do not specify the registration number of the vehicle but are on a blanket basis 
• There can often be less driving restrictions on a fleet insurance.
• While there are no quick wins for getting a cheap van insurance deal, hopefully this article has given you an idea of how your insurance is worked out. By knowing all this you can get to grips with your premiums and take sensible steps to minimise your insurance costs. 

Overall, the key tips are to shop around, choose your vehicles carefully, make sure you’re getting your no claims discounts, and make sure you’re only paying for the insurance you need.

Stephen Hughes is the General Manager of Bradshaw Bennett, an insurer involved with the pest control industry for over 35 years.

pestcontrolinsurance.co.uk

WE WANT YOUR PPC IDEAS

The article was suggested as a topic by a BPCA member. Have you got a subject you want PPC to cover? Send your article ideas to hello@bpca.org.uk