Depreciation and Private Hire Insurance

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Considering the usage of the vehicle

Prior to acquiring private hire insurance certificates, the provider will be interested in the use of the car. An increase in the number of drivers can significantly inflate the premium which you have to pay. That is why fleets that have no named drivers will have a higher cost to insure than the ones where each vehicle has a named driver. There is no guarantee that the people that use the vehicle are going to be very careful with it along the way.

Looking at the business asset

Although the car is a business asset, there are safety considerations which lead to the acquisition of private hire insurance. The people that own the business will be rightly worried that if they are not insured all the costs will not be dealt with in the manner that is expected. That can cause significant problems in the long run. These are the sorts of objectives that you need to look at in the longer term so that you get the results which you are looking for. There are other dimensions which you will need to look at as well.

Finance agreements need to be taken into considerations

The cars that have some outstanding finance to pay are a risk for the private hire insurance provider because the depreciation might put them in negative equity. For example you may insure the vehicle on a value of $40,000 but then later discover that four years down the road the value has fallen to less than $10,000. The insurer will have to make the right calculations in order to ensure that they are not paying over the odds just because you are one of their customers on the books.

The history of the driver is an important factor

A driver with a good record should be able to get cheap private hire insurance. The providers are keenly aware that the drivers are subject to enhanced tests before they become licensed for such jobs. It is therefore in the interests of the people that are running the system that they get a good reading on how these costs are managed. A driver that has never made a claim on their policy is unlikely to begin any time soon. Therefore their application will be viewed very favorably when compared to the other applicants on the books.

A risk assessment of the locality is appropriate

The insurer will look at the locality where the vehicle is going to be driven. If you are working in a “rough” area then it is likely that your private hire insurance premium will be increased accordingly. In order to come to the correct conclusion, the provider will want to see all the results of the assessments on the locality before they commit to anything. They will also want to review the way that services are provided so that they get a good deal at the end of the day. Those are the critical factors which you will take into consideration on a long term basis.

Source by Roul Arijit

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