Advertise Here [728 W x 90 H pixels]
Construction : Equipments | April 2017 | Source : Equipment India

Fleet Insurance Benefits

Ravi Kothari explains the importance of fleet insurance for a cost-effective and service-efficient fleet operation.

Transportation is one of the major drivers of the economy. India is a developing country and hence a lot of growth is expected in the transport sector. There are numerous enterprises which are in the business of transportation of passengers and goods by road and these companies owns a number of cars, vans, trucks, or buses. Such business houses have to manage fleet of vehicles and insurance of these fleets of vehicles.

What is Fleet Insurance?
Fleet insurance refers to motor insurance policy being taken by fleet operators (tours and travels, logistic companies, radio taxis, self drive companies etc) for their vehicles. It is as good as an individual taking an insurance for his or her individual vehicle as the policies are vehicle-specific unlike developed countries where the fleet owners take a single policy for all their vehicles. As such, fleet insurance is taken by goods/public carrying vehicles, but there can be private car’s fleet also. These are typically taken by companies and given to their employees under the Company Car Leasing Scheme for the employee’s personal use.

In India, insurers are yet to come up with major benefit for a fleet operator for insuring their vehicles in bulk and hence fleet insurance is an operational nightmare for the fleet operators.

How to choose the right insurer

The choice of insurer for fleet insurance should be done with a lot of care, as the opportunity loss of revenue, due to delay in claim settlement is a very common phenomenon. Firstly, the customer should look at an intermediary who can manage to work out the following:

  • Design the optimum coverages and finalise the underwriting terms and conditions, at the start of the first policy issuance date which will ensure operational efficiency in the system.
  • Execute a Service Level Agreement for Policy Issuance and Claims Management. The SLA should be minutely drafted as per the nature of risk and finalised with an insurer.
  • Turnaround time of claim servicing should be monitored strongly as one day of delay in claim settlement means a day of revenue loss.
  • Usage of technology for managing the Fleet Insurance.

Factors influencing the pricing of the fleet are:
  • Number of vehicles
  • Type of vehicle
  • Use of vehicle
  • Location of vehicle usage
  • Loss or claim history of the fleet

Historically, Fleet Insurance in India has been a neglected area, but in today’s competitive business environment, the need is well acknowledged by the fleet operators, as they need to be cost-effective and service-efficient, hence the need of the hour is optimum utilisation of fleet with minimum downtime on repairs and maintenance. Therefore insurance is an important area for the successful running of their business.


The author is Director, Retail and Motor Fleet, Ideal Insurance Brokers.
 
Advertise Here [728 W x 90 H pixels]