{"id":2010,"date":"2017-09-27T17:51:36","date_gmt":"2017-09-27T15:51:36","guid":{"rendered":"http:\/\/en.advancedfleetmanagementconsulting.com\/?p=2010"},"modified":"2017-09-27T17:51:36","modified_gmt":"2017-09-27T15:51:36","slug":"fleet-insurance-why-prices-are-rising","status":"publish","type":"post","link":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/2017\/09\/27\/fleet-insurance-why-prices-are-rising\/","title":{"rendered":"Fleet Insurance: Why Prices Are Rising…"},"content":{"rendered":"

\"Fleet<\/a>Fleet Insurance: Why Prices Are Rising…<\/strong><\/span><\/h4>\n
And What You Can Do To Avoid Them<\/h5>\n

As you may have noticed, motor insurance costs, including fleet insurance, have been on the rise of late. Indeed, according to research by Consumer Intelligence, motor premiums have risen by an average of 15.7% in the last year, a trend that is very much in line with the findings of the latest Go Compare survey which shows car insurance prices having gone up by a 1\/3 in the past two years.\u00a0Frustrating as this is for the average private motorist its obviously significant worse for a fleet operator given the number of vehicles you need to insure.<\/p>\n

There are, however, some simple ways to keep your fleet costs down, and we\u2019ll give you some insider\u2019s tips on getting a cheap fleet insurance quote. But first we\u2019ll take a look at some of the reasons behind the recent rises, reasons which lay largely not at the door of the industry, but at Number 11 Downing Street.<\/p>\n

Insurance Premium Tax (IPT<\/span>)<\/strong><\/h4>\n

The IPT<\/span> is was introduced in 1994 as part of the Finance Act and was the government\u2019s way of taxing insurance services which EU law prevented from being subject to VAT<\/span>. In its first incarnation, it was charged at just 2.5% and rose slowly, if steadily, to 6% by 2015. From September 2015 though the rate of growth began to rocket. With a new government hungry for tax revenues, the then Chancellor George Osbourne, hiked rates up to 9.5% and the rate has now reached 12% with many predicting that yet another rise will come in the Budget in November.<\/p>\n

The IPT<\/span> changes are unavoidable and have already added a significant burden to premiums. While there is nothing that can be done to reduce this burden, you can delay the impact of the next rise by getting your fleet insurance quote before November\u2019s predicted rise.<\/p>\n

The Ogden Rate<\/h4>\n

A year ago, most people \u2013 even many in the industry \u2013 when asked what the Ogden Rate was would have looked at you blankly.\u00a0It\u2019s one of those technical mechanisms that lie within many industries but which few pay too much heed to.\u00a0That all changed on the 20th March 2017 when the rate was changed from 2.5% to minus 0.75%, sending the industry into a frenzy and insurance premiums rocketing. Why?\u00a0Well because the Ogden Rate impacts on personal injury claims, claims that most commonly arise from motor policies.\u00a0And with the number of people being killed or injured on Britain\u2019s roads having climbed by 6% according to the latest government\u2019 figures, insurers have felt the need to protect themselves against the long-term costs of injury compensation.<\/p>\n

Again, this is change that\u2019s impossible to avoid but it\u2019s not impossible to limit its impact. Being able to provide safe-driving data through telematics systems and, in time, through connected cars, will help demonstrate a lower level of risk which in turn will allow insurers to offer you cheaper quotes.<\/p>\n

Inflation<\/h4>\n

If, like me, you are old enough to remember the days of double-digit inflation then an inflation rate 2.9% doesn\u2019t seem like much to shout about. The rate is on the rise though and has now hit a four-year high with leading economists predicting it will hit over 3.5% by the end of 2017.\u00a0Brexit, and the subsequent devaluation of Sterling, have made imports more expensive which have had a knock-on effect on for all industries including the insurance sector.<\/p>\n

Long-term predictions of inflation rates are, to a certain extent, guesswork, but the trend to the end of the year is certainly an upward one and what happens in 2018 will depend to a certain extent on Brexit\u2026<\/p>\n

Brexit<\/h4>\n

Whether you think it\u2019s the greatest opportunity this country has seen in the post-war era or is a case of national self-harm, Brexit is real and is going to affect everything.\u00a0In terms of insurance it\u2019s giving the large insurers a sense of financial uncertainty that\u2019s making them more risk averse which is pushing up premiums while making them far pickier about the fleet drivers they are willing to take on. There is also concern over the legal framework they are going to be working within once we leave. As mentioned above, the IPT<\/span> only came in as EU law prohibited the levying of VAT<\/span> on insurance, for example.\u00a0Having exited it\u2019s possible that the 12% IPT<\/span> rate will be scrapped \u2013 hurrah \u2013 only to be replaced by VAT<\/span> at 20%.\u00a0Concerns over Brexit and increases in premiums are already being felt by drivers.\u00a0A recent Kwik Fit survey found that 43% of its respondents are preparing to see a rise in the cost of their motor insurance and while time will tell, this could be yet another reason to look to get an early renewal on your fleet insurance.<\/p>\n

Beating The Fleet Insurance Price Hikes: What Can You Do\u2026<\/h4>\n

Despite all the gloom there is quite a lot you can do to save money on your fleet policy.\u00a0We\u2019ve looked into this in-depth here, but our top five ways to save are:<\/p>\n