Hauliers urged to tackle underinsurance

By Categories: NewsPublished On: Thursday 17 March 2016

accounting-761599_1920A haulage and motor fleet insurance specialist has urged fleet managers to take a keener interest in their insurance renewals as a result of what it calls “worrying cases of underinsurance” within the sectors.

The company says it has discovered various instances whilst quoting for insurance in recent months in which claims would have been declined due to inadequate protection.

“In these cases, the underinsured businesses had grown, or changed the nature of their business,” said Gauntlet.

“The incumbent insurance brokers, rather than asking pertinent questions about the fleet and business operation, had simply renewed the policy based on the original information supplied by the client a few years earlier.

“Even more alarmingly, in some instances, the brokers knew of the changes, but had not wished to break the news of a significantly higher premium to pay, in order to adequately protect the business.”

Gauntlet, which said it had been “shocked” at the findings, added that insurance solutions providers should not be afraid to “break ‘bad news’ if that means adequately insuring a business.”

“Where clients do pay a higher premium, to get the right level of protection in place, the Gauntlet team creates a plan of action that, if followed, will help the client significantly reduce premiums in the longer term, thanks to better risk management and improvement,” said the firm.

It cited an example of one business which expected to pay a £1,700 premium – but which switched to Gauntlet having been quoted £5,000, having realised that the £1,700 was: “money wasted, as claims would have been refused once the insurer discovered the value of the goods being carried. The haulier’s resulting losses might have destroyed the business, if the goods could not be replaced through an insurance payout.”

Ian McCarron, Gauntlet director and head of the motor fleet division, said: “We are discovering an increasing number of instances of underinsurance in cases where other brokers have not examined the fleet business in-depth and have quoted on historic information, rather than current scenarios.

“Although clients, in these instances, are shocked at having to pay more, they recognise that a policy that is not based on the true material facts relating to the risk, is of no use whatsoever.  Being underinsured is commercial suicide, particularly in a sector that is high-risk anyway and where a claim is only one driver mistake, theft, or arson attack away.

“Fleet managers need to ensure their insurance premiums are based on current situations.  If not, they could suffer a rather rude awakening when they come to make a claim.”