Reducing the cost of company motor insurance
Motor insurance is one of the most significant expenses for organisations with company cars. Did you know that the way you describe your staff’s job can affect the premium you pay? You could be making savings by using alternative terminology to describe the same role for your employees.
How much you pay for car insurance can be affected by a number of criteria, including gender, age and location. Also, it is unknown what affect, if any, Brexit may have on car insurance premiums. But one key factor that is often overlooked is the job titles used to describe a person’s occupation.
For example, if an individual submitted that they were ‘unemployed’ they would pay more for their insurance than if they stated they were ‘retired’ or a ‘housewife’. Obviously, you need to be accurate with the description you use otherwise you could invalidate the insurance. However, there are many occupations that have more than one option to choose from, using the correct one could potentially reduce your insurance costs.
What can you do?
- While insurance providers have a large number of jobs on their list, they won’t always have the perfect one, so try to be as accurate as possible to see what fits. Websites, such as this one, allow you to compare the average premiums for different job titles to find the best option to describe a role in your company.
- Ensure the descriptions are accurate, especially if you have staff doing different jobs, e.g. a building firm might have plumbers, carpenters, electricians, etc. Some will be seen as higher risk, so you don’t want to be paying that premium for everyone.
- Always read the small print in any policy to ensure your description remains accurate according to the terms and conditions.
How much could you save?
Using the comparison website mentioned previously we looked at an example where job description could affect premium costs to highlight potential savings that may be available.
A company that employs 20 ‘joiners’ pay £800 a year per person for car insurance – a total of £16,000 per year. If their job description were to be changed to ‘carpenter’ the cost would potentially be reduced to £773.50 each a year – a saving of £530 a year.
This is just an example and obviously prices will fluctuate depending on the insurance provider and other factors about the company and individual. However, you can see that allocating the correct role description on car insurance policies is crucial to not overpaying and unnecessarily increasing your businesses expenses.
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