Keeping up with fleet insurance regulatory changes

Having the most up to date insurance is an essential part of fleet vehicle companies’ operational practices. Like all types of insurance, fleet insurance is subject to regulatory changes that can impact how businesses operate and how they purchase and manage their coverage. Here, we’ll explore some of the changes, and how fleet owners can keep up with them.

Recent regulatory changes to fleet insurance

In recent years, there have been several regulatory changes to the insurance industry in general that impacts  the fleet insurance industry and how policies in this segment are underwritten . These changes have been implemented to primarily meet the needs of consumers, and fleet business owners  to ensure all insurance products sold are genuine products that provide appropriate levels of cover and add value to the policy holder.

Some of the most significant changes that have been made, or those which will need to be seriously considered include:

1. ‍Motor vehicle insurances: there has been increased regulatory scrutiny on how products are underwritten.. Regulators are concerned that some insurers  charge excessive rates for products that do not provide adequate cover or commercial value, and they are taking steps to ensure that  all insurance products are fair and reasonable. As a result, businesses may see changes in the premiums and PDS wordings  for their fleet insurance policies.
2. ‍Underwriting practices: technology is increasing being used to help insurers gather data on drivers and vehicles to better assess risk. This data can be used to identify high-risk drivers and vehicles, which can result in changes to underwriting practices. For example, some insurers may require more frequent vehicle inspections or impose restrictions on who can drive certain vehicles. This can bring into question other forms of legislation relation to privacy and the use of data.
3. ‍Safety and risk management: with the rise of technology and data analytics, insurers are placing a greater emphasis on safety and risk management. Insurers may require businesses to implement safety programs, such as driver training and vehicle maintenance programs, to reduce the risk of accidents and other losses. This again crosses over other legislations.
4. ‍Measures to meet the impact of autonomous vehicles: as autonomous vehicles become more prevalent, there will be a significant impact on the fleet insurance industry. Insurers will need to adjust their underwriting practices to account for the risks associated with autonomous vehicles. For example, there may be new liability issues to consider, such as who is responsible for accidents involving autonomous vehicles. This may lead to the development of new insurance products to specifically cater for autonomous vehicles.
5. ‍Coverage requirements: regulatory changes may also impact the types of coverage that businesses are required to carry for their fleets. For example, businesses may need to carry higher levels of liability coverage to protect against lawsuits in the event of an accident. Resulting from general changes to the way vehicles are used, the technology in vehicles and changing laws relating to all aspect of Transport use.

Specific sweeping changes to motor vehicle insurance in general were made by the Australian Government following a Royal Commission Report in Australia in 2021. Some of the reforms that were made are:

A deferred sales model

The deferred sales model for ‘add-on’ insurance was implemented to help consumers make informed decisions. The model introduced a pause of four days between the sale of a vehicle and the sale of any add-on insurance products.

Anti-hawking

Anti-hawking restrictions put some prohibitions on insurers offering insurance products to consumers while that are selling other products.

Product design and distribution obligations

These obligations stipulate that financial products designed by insurers must be consistent with consumers likely objectives, financial situation and needs.  

Duty to not make a misrepresentation

A duty for consumers to not make a misrepresentation to insurers, means the burden is on the insurer to gather the appropriate information to help them decide whether or not they will insure the asset, and at what price.  

Claims handling as a financial service

A claims handling and settling service will assist people in making claims, as well as some other engagements between insurers and the insured party or their representative.

Keeping up with regulations and compliance requirements

With the fleet insurance regulatory landscape constantly evolving, fleet owners need to stay informed and up to date with these changes to ensure that they remain compliant and have adequate insurance coverage. Here are some tips to help fleet owners keep up with regulatory changes:

Stay informed

Fleet owners can stay informed about regulatory changes in fleet insurance and also in general to the laws that will share the use of motor vehiccles by subscribing to industry publications, attending conferences and events, and staying connected with industry experts such as insurance brokers who may act on behalf of a fleet business. Regularly reviewing industry news and trends can provide valuable insights into regulatory changes that could impact their businesses.

Work closely with insurance providers

Fleet owners should work closely with their insurance brokers and providers to ensure that they have the right coverage and comply with all applicable regulations. Insurance providers can help fleet owners navigate regulatory changes and provide guidance on how to adjust their policies accordingly.

Review and update insurance policies regularly

Fleet owners should regularly review and update their insurance policies to ensure that they have adequate coverage and are compliant with any regulatory changes. It's also essential to review policies annually to ensure that they reflect any changes in the business, such as new vehicles or new drivers. It is important to lead the way by discussing market changes with your insurance brokers to ensure you have the right cover.

Implement safety and risk management programs

As regulatory changes place a greater emphasis on safety and risk management, fleet owners should implement safety and risk management programs to reduce the risk of accidents and losses. This could include driver training programs, vehicle maintenance schedules, and implementing safety policies and procedures.

Be proactive

Fleet owners should be proactive – they should aim to anticipate any regulatory changes and adapt to them before they become mandatory. This could involve working with insurance providers to identify potential changes and preparing for them in advance.

Regulatory changes in the fleet insurance industry can have a significant impact on businesses that operate motor vehicle fleets. Keeping up with the changes that will impact your fleet insurance is crucial for fleet owners to ensure that they remain compliant and have adequate insurance coverage. By staying informed, working closely with insurance providers, reviewing and updating insurance policies regularly, implementing safety and risk management programs, and being proactive, fleet owners can mitigate risk and ensure that their businesses remain protected.