20th April 2021
As you will be aware, there has been a growing problem over the past few years of certain cars being popularly targeted by thieves. This had led the insurance industry to put conditions on clients for more and more models, particularly 4x4s.
As can be seen from the following Daily Telegraph article in the Money section by Will Kirkham on 10th April 2020 (reproduced in full) one of the more popular approaches for insurers is to ask for a tracker to be fitted to the car.
Four-by-four owners blocked from car cover after spike in thefts
Car insurers have refused to cover four-by-four vehicles unless they have been fitted with a specialist tracking device following a rise in thefts.
In some cases, trackers fitted as standard by vehicle manufacturers have been deemed inadequate by insurers, according to Broadway Insurance Brokers.
Data from the Office for National Statistics showed that 12pc of all burglaries in England and Wales in the 12 months to March last year involved theft of cars or car parts, double the figures for 2010. Several of the bestselling four-by-four models were among the most frequently stolen vehicles in Britain, according to the Driver and Vehicle Licensing Agency.
The Land Rover Range Rover was the second most likely vehicle to be stolen in 2020, with 2,881 illegally taken over the year.
Eleanor Moore, of Broadway Insurance Brokers, said it was a growing issue: “Having a tracking device is now a regular requirement before a quote is even provided. Even so, we have seen plenty of cases in which vehicles with trackers are being turned down because they’re not regarded as offering sufficient protection.”
Ms Moore said that one client saw a claim refused by his insurer after his car, which was fitted with a tracker, was stolen. His was because the client had failed to renew his tracker subscription, meaning the device was not operational at the time of the theft. This left him liable for £40,000 in car finance payments.
“It’s important to remember that insurers are under no obligation to provide cover,” she said.
“Those motorists wanting to take out and renew policies for their cars need to make sure that they understand and abide by the small print.”
Some 74,769 vehicles were stolen across Britain last year, according to DVLA figures obtained by Riverdale Leasing, a car firm, nearly 20,000 more than the previous year.
Despite this, car insurance costs have fallen to a seven year low across the market due to a drop in claims during the pandemic, according to Moneysupermarket, a comparison site
It is clear these tracker requirements mean some considerations for your clients and we encourage you to engage with them so that they don’t make any costly assumptions. While it may feel that an extra few minutes on a sale which the client has already confirmed compliance with all the endorsements seems like overkill, those two minutes will be a great investment if it takes away the need for a call to explain that cover isn’t in place for a car that has been stolen.
Thankfully, we have very few occasions where we have to deliver bad news to a client, but it’s not a nice conversation on those limited occasions that we do. It’s especially hard to have when it’s clear the client has made an honest, if grave, error.
Here are a few probing questions to add to the conversation so that it doesn’t stop at, “this policy requires you to have an active tracker, can you confirm you can comply with endorsement X?”…”Yes”.
If the car has a manufacturer fitted tracker:
Is it activated?
• Some manufacturers include a tracker, but don’t necessarily subscribe you to a tracking company.
• Even if they did include a subscription when you bought the car, are the subscriptions up-to-date?
a. Perhaps they offered a 1- or 2-year subscription. Has this now lapsed?
b. Did you continue it in your own name?
What type of tracker was fitted?
• It may be that the tracker is a standard tracker, but the insurance requires an Automatic Driver Recognition tracker. Does the manufacturer’s tracker meet the insurer’s requirements?
Regardless of whether the client believes the manufacturer fitted a tracker, or perhaps a previous owner says they added one to the vehicle:
• Are you sure there is a tracker fitted?
• Have you got an instalment certificate?
• Is the tracker Thatcham approved?
• Are you aware that any automatic driver recognition device must be removed from the vehicle when it’s unattended?
You may have your own set of questions. The important thing is to engage with clients to fully understand what’s required of them so that they don’t make the costly mistake of assuming what they have (or think they have) will cover them for all eventualities.
We all know it’s preferable to give monosyllabic answers to insurance proposal questions, but it really is in your clients’ interest to engage in this subject. With thefts up over 33% in a year, security requirements are only likely to become more stringent and may draw more people into understanding the reality of the situation.