There are a number of factors that impact the level of insurance premium you pay. Key considerations include; –
Your fleet claims history is one of the main factors that dictates premium levels. An insurer will request a copy of previous claims from which they will ascertain your claims frequency, what has been paid out in claims and any reserves for unsettled claims. The fewer outstanding claims you have, the better it is for helping to reduce your potential premiums.
This history will be compared to your industry standards for your specific business and using statistical analysis, they will work out the risk you pose. If your claims prove to be higher than average, your premium will reflect this, or you may even be refused a quote if your claims history is significantly above average.
Risk is the crucial factor for insurers when deciding premiums. We will work with you to provide evidence that you are taking proactive steps to minimise that risk where possible. Insurers will also look at your risk management process such as whether you use dash cameras, telematics, undertake driver training and monitoring etc.
Underwriters will also add on a percentage for ‘catastrophe’ risk; how much will depend on the size of the vehicles in the fleet (larger vehicles have the potential to cause greater damage in accidents) and how they are used.
Insurers also use Claims Loss Ratio as another rating factor. This is a mathematical calculation that takes the total claims that have been made, divided by the total premiums. Each insurance company formulates its own target loss ratio, and it reflects the amount an insurer has paid out as claims as a % of the premiums paid.
Factors related to the drivers, which may affect your premiums include: