Modern car insurance

Is a replacement vehicle the best way to get you back on the road?


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I recently read an interesting blog about car insurance. No, really.

In the insurance industry if you have to make a claim, you frequently are given a courtesy car to ensure you can still get around. The interesting bit was wondering whether that is really the best solution for people temporarily deprived of their vehicle.

In the blog, James Roberts, business development director for insurance, Europcar, argues that people, particularly in cities, might actually find the option of taking taxis or even car club vehicles more convenient. I guess Europcar – which I am sure provides many of the replacement car hires – has been looking at the future of transport where these kind of shared economy solutions are expected to become much more common. It also (and this can’t have been out of his mind) owns E-Car Club, the electric car club.

I thought about this. On the one hand, is this just a cheap way out for insurance companies? I’m not so sure. I’ve been offered a few courtesy cars over the years but the reality of a vehicle replacement has always been a little short of ‘seamless service’.

Insurers usually have deals with the big names in car hire, and (for me) the nearest one of these is 10 miles away, which is a bit of a trek for pick up and drop off. It always involves a fair amount of paperwork so it’s never a particularly speedy experience.

For a few days I’ve usually done without and accepted that I’ll do the shopping later. Then the standard replacement car is not necessarily suitable for the things we do – try loading a standard issue small vehicle with the proceeds of a trip to Ikea, or a couple of bikes.

A cocktail of ‘mobility solutions’ (the buzzwords by which a blend of cars, taxis and other transport is becoming known) could actually work better. Taxis for the local trip to the supermarket or cinema. An automatic sign-up for the local car club for a day out (you can often unlock these cars with your mobile phone so no long journeys and paperwork), a train ticket for a longer trip.

Obviously these solutions are much more numerous in London where you can hire anything from a BMW (via the DriveNow! car club) to a ZipVan by the hour.

Outside London, there are still options though – car clubs have spread to most major cities and even some quite small towns. That said, it might be quicker and easier to borrow a car from one of your neighbours.

Any insurer should surely be able to set up a short term insurance policy and pay your neighbor to show their gratitude. And if they want to outsource that, there are options like Cuvva or any of the peer-to-peer car hire companies like HiyaCar and EasyCarClub.

If designing a package is too complicated, surely insurers could just offer credits to people so they could choose their own solutions? There’s a lot of evidence that people like to be given choice and control over their travel options.

A car you have to go and get vs credits for taxi rides, train trips, even delivery charges for a supermarket shop and borrowing next door’s car for a day out? I know the latter would have seen me through the last unfortunate garage visit.


By Beate Kubitz at 31 Jul 2018, 00:00 AM