Fleet operators using usage-based insurance are seeing significant savings as a result of reduced mileage during the pandemic.
Flexible insurance provider Zego – which started rolling out its pay-as-you-go insurance to corporate fleets at the start of 2020 – said 95% of private hire fleets in the company’s network had driven fewer miles in September than originally estimated in their initial quote. And as a result, the average firm has been able to save £108 a month per active vehicle on the road, compared to traditional insurance, according to the firm.
For a business with a fleet of 50 active vehicles, this equates to a saving of £5,400 per month, in addition to the premium saved on vehicles that have remained off the road; which is usually around an 80% saving on the monthly premium per vehicle.
One fleet business that has reaped the rewards of this approach is replacement vehicle firm Limitless Accident Management. The company, which specialises in helping non-fault motorists stay mobile following an accident, has cut its insurance bill by 63% since opting for Zego’s flexible policy and said it had enabled the business to flex between low and high levels of trade.
Ines Feracci, director for B2B at Zego, said: “Flexible insurance offers a potentially crucial lifeline for fleet operators, many of which have seen a steep decline in activity this year. A lot of our customers are saving thousands of pounds a month on flexible policies, which they’ve been able to put to better use in the business.
“In today’s world, the traditional annual insurance model no longer seems fit for purpose. Businesses wouldn’t pay rent for property they don’t occupy or pay for stock they haven’t received, so why should they pay for insurance they haven’t used?”