Grey fleet pay-as-you-go cover launched

Insurance broker Willis has tailored an insurance solution that can be used in conjunction with Fleet Support Group’s RiskMaster online at-work driving safety initiative that manages vehicles, drivers and journeys to enable employers to reduce their risk exposure.

At the core of the RiskMaster ‘toolbox’ is a Driver Operating Life Report, which embraces individual Permits to Drive that are issued to all employees once they meet key criteria laid down by their employer on enrolment in the system.

More than 20,000 employees - including staff that drive their own vehicles on business trips - are already enrolled in the programme.

However, some public and private sector organisations have expressed difficulty in ensuring that drivers have the correct insurance in place, which is one of the key criteria, to enable them to drive their own cars on business trips.

Therefore, due to customer demand, Fleet Support Group asked Willis to create a special grey fleet insurance scheme.

Underwritten by international insurer Catlin Group, the cover, which can be either comprehensive or third party fire and theft, uses HM Revenue and Customs’ tax-free Approved Mileage Allowance Payments (AMAP) as its premium basis.

The AMAP rate for the first 10,000 business miles increased from 40p to 45p per mile on April 6. The grey fleet insurance premium can then effectively be funded from within the additional 5p per mile paid by employers to own car users. For comprehensive cover the premium rate quoted for one potential customer is 4.1p per mile and for third party fire and theft cover it is 3.3p per mile.

Steve Hall, development director in the Bristol office of Willis, who created the product, said: “While the insurer requires a deposit premium, which depends on the number of grey fleet drivers involved in the scheme, the premium is collected on a pay-as-you-go basis from employees’ mileage expense claims.

“What it means in financial terms is that if insured on a comprehensive policy, employees will receive 40.9p per mile with the remaining 4.1p per mile deducted by the employer to pay for the cost of insurance.”

Additionally, as part of the administration process, Catlin require a monthly mileage declaration.

Through the scheme, employees can also benefit from significant discounts and personal insurances to help them reduce their daily cost of living.

Hall said: “Creation of this product, which we believe is an industry first, removes the insurance administration headache for employers and cost effectively ensures that employees have the correct cover in place when driving their own cars on work-related journeys.”