BOARD MEMBERS’ OUTLOOK Needless to say, I did not take the job.
IF THERE’S A WAY TO WRIGGLE OUT FROM UNDER, THEY’LL FIND IT…
Brace yourself for a view of the - how shall we say? – controversial field of vehicle insurance from Steven Toy, NPHTA member from Cannock Chase:
If there is one UK industry on which we all rely which can potentially wreak economic havoc, it is the vehicle insurance industry for all its restrictions, intrusions and exclusions.
It is simply not fit for purpose.
This is, in part, an inevitable consequence of the fact that the buyer is legally required to have it but the seller is not required to provide it. On such a tilted playing field the free market just does not work as its proponents would like to insist.
The government recently asked the industry, given the Covid-19 crisis, to be a little more flexible and less restrictive regarding activities covered by policies or not, as the case often is.
Whether they will or not is another matter...
If you have hire and reward insurance, are you covered for deliveries, or general business use, for example?
As for general business use, I’ve not found a single insurance provider in the UK who will provide such cover along with hire and reward. Moreover, some insurers will void your hire and reward policy if they discover that you have another source of gainful employment even if you use a different vehicle which is insured separately for this purpose.
Last year I was offered a job visiting clients to correct documentation for finance companies. The job was to scan bank statements, ID, driving licence, proof of address, take a few photos of the vehicle and its owner before forwarding the above to the loan company. If everything was in order, the applicant would receive their loan within the hour. For my troubles I was to be paid £60 per visit plus a mileage allowance.
My hire and reward insurer refused to cover me for this, as did every other. I was told that I was lucky that my policy covered commuting, not that this was of any use to me, as many did not.
APRIL 2020
In plain English this means I’m basically covered for all lawful business activities plus hire and reward. In Insurancespeak, I’m not. I called the broker who originally provided the cover. They basically told me that I’m not covered for what it says I’m covered for. “The business of the insured” does not mean general business use and the following word “including” has no meaning in this sentence.
Hmmm....
In the last few days, I have de-licensed my taxi and cancelled the renewal of my hire and reward policy for obvious reasons. I’m now insured only for social and domestic use via a different provider sourced through a price comparison website.
It was interesting but not surprising to note that as a taxi driver (currently not working) my premium was loaded somewhat. However, if I entered “unemployed” instead, my quote shot up by nearly another 200 quid.
Some insurers refuse to offer social domestic cover to taxi and private hire drivers at all under any circumstances despite the fact that common sense says we are surely a low risk given that for us, social domestic mileage is, in most cases,
I rang a number of brokers regarding this and they all told me the same thing: you can’t have hire and reward plus general business use as there is no market for it, apparently. I suggested that there was such a market but potentially many thousands of drivers in the gig economy were simply blissfully unaware that they were driving around without appropriate insurance cover in place.
Think of all those drivers working for a particular peer-to-peer app connecting riders with drivers who only work part time. That’s the majority of them.
They obviously have other jobs delivering food, working in restaurants or some other lawful business. Are they insured for those other activities?
They probably wouldn’t even know.
Checking your policy wording is no guarantee either. I looked at a hire and reward policy document of mine from three years ago. It clearly states:
“Use for social, domestic and pleasure purposes and for the business of the Insured including the carriage of passengers or goods for hire and reward...”
less than 5000 miles a year. The ignoramuses in the insurance industry are just having none of it!
Should insurers be permitted to discriminate in this way?
What evidence do they have that unemployed people looking for work, for example, pose such a higher risk? I want to see this evidence.
Has anyone bashed into your car with a shopping trolley in a supermarket car park while you were parked in a bay and minding your own business in the last five years?
If the answer is yes, the insurance industry sucks air through its teeth. Even if you made no claim and got the ding sorted for thirty quid - or didn’t even bother getting it fixed.
How many kids have you got? For some inexplicable reason the magic number three triggers more industry teeth-sucking. Or is it four? That depends on the insurer.
Do you go to car boot sales on a Sunday? Not covered but you’re fine if you go on a Saturday although it will bump up your premium.
I jest, of course, but I’m sure you get the point. This cherry picking nonsense has to stop. The intrusive questions, restrictions, arbitrary premium hikes and exclusions need to stop for the good of us all.
One solution is to follow the example of other European countries where it is the vehicle which is insured and not the driver. Thus, a licensed taxi would be insured for anyone to drive it who had the appropriate licence to do so and for any lawful purpose.
You may say that this could make insurance more expensive for everyone if providers were forced to abandon their capricious practies.
If, in the event of a collision they
didn’t actively encourage spurious claims for whiplash and the like from third parties I’m sure this could more than offset any greater overall cost. (This happened very recently to a colleague of mine whose car was reversed into in a supermarket car park. He refused to entertain the idea, by the way, as he is a man of honesty and integrity).
Finally, I must stress that the fault lies not with the brokers. They have generally provided excellent service. The problem is with the underwriters and those who regulate them, although I’m not expecting this to change any time soon given that the current Prime Minister has apparently been paid handsomely to give after-dinner speeches at insurance industry functions.
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