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The Gap in Private Hire Insurance Provision

 
18-May-2011

The legislative environment

The state legislatures have deemed it necessary that all drivers have some form of insurance. The scheme was opened up in order to reduce the number of accidents where no one was able to or willing to compensate the victims. Normally the victims were paid through a consolidated fund which sectors such as the private hire insurance provider contributed. This places burdens on other careful drivers who see that their premiums are rising on a fairly regular basis regardless of their approach to the road.

The reactions of the private hire insurance providers

The providers have not been as enthusiastic as the government might have hoped. This is because the process of hiring out a vehicle significantly increases the chances of an incident. Sometimes robbers will target the driver or the passengers may not be as benign as they look. Apart from the public safety issues the insurers would prefer to go for the easy packages where the risk is well controlled. This is something that might be accused of reducing the level of public safety on the roads for the people that use these vehicles.

Risk management and this type of insurance

It is generally accepted that private hire insurance has a higher risk factor than if you are using the vehicle for private use only. Therefore the insurers have attempted to overcome this gap through the incremental premiums. Of course the entrepreneurs will be worried about the impact on their business. In general terms it must be said that the charges levied are often within the acceptable range for the types of risk that the company will be taking on through its initiatives. Therefore the complaints on the scheme are not really justified in the first instance.

Drivers and entrepreneurs as partners

The people that own these businesses will be looking for solutions that provide them with the maximum flexibility factor. Therefore it is unsurprising that they will be looking to reduce the premiums which are charged on the private hire insurance package. The attempts that they have made so far have not always been successful given the fact that the sector is largely liberalized. There is very little that the government can do to keep these things in check. Instead there is a great deal of change that has to be implemented before the affordability ambitions of the partners are met.

Information relating to the packages

The fact that there is provision of private hire insurance does not mean that all the relevant drivers get access to the most important information. That is why the internet will continue to play an important role in this industry. It allows the business partners to access the latest information which relates to the products that are being proposed. In addition there is an understanding that the internet will let the business people compare the various packages so that they can get the best deal in due course. This is a great benefit for the people that are looking to improve the effectiveness of their businesses.

 
Category : Insurance
 
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