Greedy claims management companies are forcing up insurance premiums for businesses with vehicle fleets, experts have warned.
According to fleet specialists ConstructionInsure.co.uk, insurance premiums have rocketed due to claims management companies putting in big bills for hire vehicles. With fewer people claiming for personal injury after a crash, claim managements companies are replacing this lost revenue with excessive hire charges. These include bills of up to £25,000 for replacement vehicle hire costs, even though the cost of repairing vehicle damage might be only hundreds of pounds.
They cited a number of insurance claims including a scaffolding company’s van, which was involved in a minor collision with a parked motor cycle. The motorcycle, worth £1,500, was parked and hit by a van. The claims management company placed the motorcyclist on a hire bike at a cost of £150 a day. By the time the management company had finished with their “delay tactics” the hire bill came to £45,000 – far higher than the cost of the actual repair. The subsequent insurance claim reportedly forced the scaffolding company’s fleet insurance premium up from £12,000 to £60,000 the following year – an increase of 500%.
In another case, a haulage vehicle knocked a parked Jaguar, which incurred wheel rim damage and a punctured tyre costing around £1,000 to repair. To avoid any hire charges, all the claims management company had to do was replace the tyre and wait for repairs to be authorised. Instead, they reportedly claimed the car was undriveable and the hire costs of the replacement car came to £10,000.
Mark Herbert of ConstructionInsure.co.uk said claims management companies were to blame for this worrying trend.
“As a broker we try our very best to keep down the cost of clients’ fleet insurance premiums every year with fleet management techniques,” he noted. “As a result, loss ratios for these clients are kept to a minimum, meaning premiums are bearable for the client and the cost of their fleet insurance is not eating into their profits and gives them a better bottom line.”
However, Herbert said there is no control over what these management companies believe they can charge and how their actions affect client’s premiums “by trying their luck to get these extortionate figures paid.”
“It is circumstances like this which is putting pressure on the industry to line non-participants’ pockets,” he added. “The end is good honest companies are going out of business due to their greed.”
