Mobility scooters and other products are often regarded as lifelines by their owners. For most end-users, this is absolutely the case, and having a safety net to back up their purchase has never been so important. Here, leading providers outline why it pays for retailers to offer specialist policies and what insurance products are available for dealers to ensure they have the means to capitalise on a growing market.
While you cannot run a successful mobility business without taking a degree of calculated risk, companies know that it is wise to ensure they are covered. The prospect of a retail outlet losing its stock is enough to keep any mobility boss awake at night and so most are forward-thinking enough to ensure their shops are covered.
But the need for insurance does not stop at the showroom door and it extends down to customers who want to be safe in the knowledge that the products they have spent money on will stay with them. This is an opportunity for retailers who want to be able to offer their customers peace of mind at a time when it has never been so important to cover high value purchases.
“There would eventually be tests for clients before they could get insurance or even need a licence and you would have to register all products with a licence plate and insurance documents. This would make the sale of mobility products more cumbersome and put off a lot of potential clients”
In fact, offering insurance and extended warranties at point of sale is a way for mobility retailers to fulfil their duty of care to their customers and safeguard their businesses. That’s according to Danny Bates, sales director at mobility insurance specialist Mark Bates Ltd, who knows that many scooter users worry about how they would get home if their equipment was stolen or damaged while out.
“Our in-house claims team works closely with our retailer network to get their customers back on the road and ensure that they retain an important source of revenue,” says Bates. “Furthermore, liability claims are continuing to rise therefore it is really important that customers protect themselves from potentially expensive legal action.”
With an estimated 350,000 mobility scooters being used in the UK today the opportunities for retailers offering insurance are strong. And the importance of insuring clients is not lost on James Nicholls, director of leading provider First Senior Group, not least because of potential legislative changes which could hit the sector soon. The proposed changes include making insurance on scooters mandatory, and while in theory this sounds like a good idea, Nicholls questions its impact on the industry.
“There will be a lot more regulation,” he says. “There would eventually be tests for clients before they could get insurance or even need a licence and you would have to register all products with a licence plate and insurance documents. This would make the sale of mobility products more cumbersome and put off a lot of potential clients. Then we need to consider how this would be enforced and the drain on the police force and the potential bad publicity of scooter users being prosecuted for not having insurance or having their product impounded. Therefore the more the suppliers make sure their clients have insurance, the less likely that regulation will be forced upon you.”
While compulsory insurance is yet to be brought to the UK the mobility scooter market is growing rapidly and for Andy Mellor, head of business operations at Fish Insurance, a rise in accidents is “clear proof” that protection is necessary. Mellor says that in cases where a mobility scooter is uninsured, victims can bring a claim against the driver, who may be unable to fork out for compensation and legal fees.
“With this in mind, it is important that retailers offer insurance to their customers as by doing so they are demonstrating best practice by showing that they have their customers’ best interests at heart. The safety and wellbeing of customers is very important to Fish and in 2017 we created a Mobility Scooter Safety Guide. We are also planning something special for Naidex 2018 where we will be focusing on what more we can all do to improve scooter safety for everyone.”
Similarly, insurance company Chartwell, which has a specialist mobility department, reiterates the importance of mobility retailers offering insurance and their duty of care for their customers to cover them in the event of an accident resulting in a pay-out for damage, repairs or personal injury.
The firm outlines: “Chartwell provides cover for third party liability up to £2m and additionally our legal expenses cover will provide the relevant legal advice to recover any losses from third parties. Secondly, with mobility scooters being an expensive purchase there is of course the risk of theft. Without insurance, the unthinkable could happen and leave the user without mobility and, of course, out of pocket.”
The rising number of scooters in the UK spells a positive outlook for mobility insurance products in retail outlets. Mobility insurance is no different from other sectors in the industry in that an increasing and ageing population means a greater demand for products. But the sector is also no different in that it is faced with hurdles which threaten to impact on its profitability.
In Nicholls’ eyes, the main challenges that face insurance companies this year are regulation and keeping premiums affordable. The last few years has seen pressures mount with IPT (Insurance Premium Tax) rise from 6% to 12%. Nicholls says the sector has seen more stringent regulation from the FCA, especially when dealing with appointed representatives and the finance licences switch from the OFT to the FCA. This has meant a lot more regulation, compliance and extensive ongoing reports.
“The more the suppliers make sure their clients have insurance, the less likely that regulation will be forced upon you”
Nicholls adds: “Then in May we have the General Data Protection Regulation (GDPR) coming into force which will affect all businesses large and small in the UK, and this will add additional costs to handling client data. Having said all that First Senior had a record year last year and expects 2018 to be even better as it sees more suppliers using its products. “The big challenge for us is dealing with the growth, keeping premiums as affordable as possible while dealing with the regulations, and developing new products that our suppliers and end-users require,” says Nicholls.
The introduction of GDPR is certainly something for all insurance companies and their partners to consider but Chartwell’s Adrian Flux brand is working to ensure that it fully complies with the GDPR and it does not envisage the new regulation to have any adverse impact on how it communicates with its partners. It believes that the mobility insurance market is relatively new and with its range of products it hopes to be in a position to meet any challenges.
Meanwhile, Bates envisages the main pressures in the sector this year to come from many customers basing their insurance purchase decisions on price alone given the competitive nature of the insurance market. He is concerned that people are not buying based on the quality of cover and says that Mark Bates Ltd is always looking to improve its schemes to ensure it is offering products which are competitively placed in the market.
Like all sectors in the mobility industry suppliers continue to drive innovation and adjust their businesses to ensure they are able to continue to support their retail partners. Insurance providers across the board are developing their offers so that both dealers and their clients can rest easy and in the process are helping to expand profitable avenues for mobility sellers. Changes to the insurance segment are difficult to predict but as things stand one trend which seems certain is that it is a growing market which presents retailers with attractive opportunities.