Motor Fleet Insurance

Policies can be issued where driving is restricted to named persons or where any person is permitted to drive. Where the policy is restricted to named persons, any required change of drivers would need to be notified to the insurer and agreement reached prior to that person being allowed to drive. Where the policy is issued on an “Any” driver basis, this would not be necessary, but even here there are some limitations. The obvious one being that the driver in question must have a valid licence and be using the vehicle within the limitations of his/her licence.

Others would be, for example, that the driver must have the permission of the policyholder to drive (this is to avoid the possibility of a thief taking the vehicle and the insurer having to deal with a claim from a third-party for an accident caused by the thief), or a driver who has serious motoring convictions or a record of accidents being allowed to drive without the insurers being aware or agreeing to include him/her. Generally speaking, the odd speeding conviction would not require prior notification in the case of an occasional driver, but anything more serious would. Each insurer may have slightly different requirements here and if in doubt, reference should be made to the insurer in question.

Driver’s motoring convictions are now recorded electronically on https://www.gov.uk/check-driving-information and counterpart driving licences are now no longer used to record them. For fleet policyholders, annual checks (or induction checks for new employees) should be undertaken for all company vehicle drivers. For the company to be able to do this, they will now have to check electronically after obtaining permission (and the relevant security code) from the individual concerned.

Unfortunately, there has, in recent years, been a huge rise in the number of whiplash or similar claims and some of these are as a result of staged accidents. Even without the staged accident issue, the circumstances of the collision are often disputed later. Dash cams can provide very useful evidence of the true accident circumstances and can help insurers to rebut false allegations and thus reduce their claims costs. There is also an argument that the installation of a dash cam, particularly on company provided vehicles, will discourage poor driving behaviour as the driving style will be recorded.

As of yet we are unaware of any insurer offering a premium discount for dash cams, but for fleet operators, if they help to reduce overall claims costs this will in turn have a beneficial impact on future premiums.

On a company fleet the vehicles covered will be “Any motor vehicle the property of the policyholder or hired, leased or lent to them”, unless the policy has been written on a specified vehicle basis where a separate certificate bearing a registration number is issued for each vehicle insured. Thus automatic cover is given for vehicles temporarily hired in – although these should still be notified to the insurer as a charge will be made for each one. The policy will not cover vehicles belonging to employees other than as follows:

a) Vehicles owned by Directors may be included, but this must be by agreement and separate certificates should be issued as they would fall outside the definition of the vehicles insured as they are not “the property of the policyholder”.

b) Sometimes, employees may use their own vehicles on their employer’s business and as such the employer can potentially be held liable for any accidents that occur if, for example, the employee’s own motor insurance does not cover them for business use. This feature of cover is known as “Occasional Business Use” and may be included in the insurer’s standard policy or added as a negotiated extra. It should be noted, however, that the employee’s vehicle should nevertheless be insured on its own policy to be on the road.

Automatic cover is given for driving in EU countries as well as Iceland, Norway and Switzerland. However, by International Agreement this is limited to the minimum cover that is legally required in each particular country. Typically, this is third party only cover, so it would not include the theft of, or damage, to your own vehicle. Many insurers will, however, automatically provide the same cover as the policy provides for the UK so if you have Comprehensive cover in the UK, you will benefit from Comprehensive cover in the EU and the associated countries listed above as well, but you should check with your insurer accordingly.

The most frequently visited country of the EU by UK citizens is France and the French have some of the most onerous requirements for the equipment that drivers are legally obliged to carry. This includes the requirement to carry your own breathalyser (although apparently there is no penalty yet for not carrying one)! For more information, please see www.rac.co.uk/drive/travel/country/france . The site also provides details of the requirements for other countries – simply type in the name of the country at the end of the address.

This records electronically whether or not a vehicle is noted as being insured. The police are able to access this database more or less instantly to check the insurance status of any vehicle simply by entering its registration number. Similarly when taxing a vehicle using the on-line facility operated by the Driving & Vehicle Licensing Authority (DVLA), the M.I.D. is electronically checked to ensure that the vehicle being taxed is insured. While the M.I.D. will record whether the vehicle is insured, but it does not record who is able to drive the vehicle or for what purpose.

NOTE: If the vehicle has been newly acquired, the M.I.D. may not yet have been updated or the registration number of the vehicle has been inaccurately quoted when being insured. For these reasons motor insurance certificates are still used and will take precedence over any information recorded or unrecorded on the M.I.D. 

Many motor insurance certificates are issued with the vehicle description being “Any motor vehicle the property of the policyholder or hired, leased or lent to them”. These are known as “open” certificates and this is done to avoid the administration headache of issuing a new certificate every time there is a change of vehicle or in the case of fleet policies issuing a separate certificate for every vehicle included – which may run into the hundreds. 

Of course, where the certificates issued are of a specified nature i.e. they specifically include the vehicle registration number, then any newly acquired vehicle would not be insured until either the M.I.D. has been updated or a new certificate has been issued.

It is common in the case of (larger) fleets, for the fleet operator to have responsibility for updating the M.I.D. and in this case, there is no need for the fleet operator to also advise the broker or insurer of any changes. Where updating the M.I.D. is the responsibility of the broker or the insurer, then it is vitally important that the broker or insurer is notified of any changes so the updating may be carried out. It makes sense for the policyholder to inform of changes as soon as possible to avoid any difficulties that might be encountered due to a delay between the vehicle being used on the road and the M.I.D. being updated to show that it is insured. In any event the broker or insurer will need some time to administer the updating of the M.I.D. to avoid being in breach of the legal responsibilities.

The issue of such certificates does not, however, absolve the policyholder from advising his insurers of any change of vehicle and the policyholder, broker or insurer still has a duty to ensure that all vehicles insured are recorded on the M.I.D. within 14 days.