East London’s A to Z Minicoaches is voicing concerns over escalating insurance costs that are stifling the growth of small transport operators. The company, which recently acquired a 19-seat Mercedes-Benz Sprinter to expand its fleet to three vehicles, faced a staggering insurance quote of £14,000 for the new minicoach. This quote was provided through a broker despite the vehicle’s cost of £120,000. Unable to secure a reasonably priced policy, Director Aziz Aissa was compelled to sell the minicoach.
The vehicle was equipped with advanced security features, including CCTV and a tracking device, and was covered under a policy with a three-named driver restriction. According to Aissa, the high insurance cost is attributed to the vehicle’s location within the M25, although he does not fault the broker for this. The company’s operating center is well-secured with alarms, CCTV, and security doors.
A further complication arises from the fact that some insurers do not classify A to Z’s fleet as a “fleet” due to its size, exacerbating the insurance challenge. Currently, A to Z pays £6,500 to insure two less valuable minicoaches and is now considering purchasing a 16-seat Ford Transit, which would be added to an existing policy.
Mr. Aissa criticizes the insurance industry‘s approach to high-value vehicles within the M25, stating that it is increasingly difficult for small operators to grow under these conditions. He notes that despite taking extensive safety measures, insurance companies continue to impose prohibitively high premiums. “It is disheartening that unless you are a large operator, these insurance companies are unwilling to offer reasonable terms,” he said. “This effectively stifles growth and innovation in the industry.”
Insurance companies have not clarified why A to Z is not classified as a fleet for coverage purposes, though A to Z’s broker indicated that most insurers require a minimum of five vehicles for such classification. Mr. Aissa believes that the issue of high insurance costs warrants further discussion within the industry and expects that other operators in the M25 are experiencing similar difficulties.
