Slide 1. Introduction.

            The class develops what daily insurance is, when it is appropriate, and its implications for fleet management.

Slide 2. Car insurance day.

• What is car insurance day?.

            Car insurance day is a policy that can be taken out for days, weeks, or months. It is ideal for insuring a vehicle for specific periods, for example, when it has a temporary license plate or when it is used infrequently.

            Following is a description of car insurance day in Spain, which is the same or similar in any country, both for fleets and individuals.

1. It covers the compulsory civil liability for legal driving, just like an annual policy.
2. In many cases, it allows you to add additional coverage, such as roadside assistance, legal defense, and even basic own damage, depending on the product.
3. It is taken out and paid for only for the time the car will be used: 24 hours, several days, or a few weeks.

            It does not replace traditional annual insurance, but is intended for occasional use of the vehicle.

            As long as the car is uninsured, it cannot be driven or parked on public roads.

• What basic and extended coverage do daily car insurance policies offer?.

            Daily car insurance offers the same coverage as annual insurance, the only difference being the duration of the coverage. If you take out compulsory civil liability insurance on a daily basis, you will be covered for any material damage or personal injury caused to third parties by your vehicle.

            This type of insurance is the most popular, as it meets a very specific need: complying with the law. However, other types of insurance are also available, such as extended civil liability, travel assistance, roadside assistance, window insurance, and theft insurance, to name a few.

• Which vehicles can take out this type of insurance.

            In general, companies accept the following types of vehicles for daily insurance policies:

1. Passenger cars.
2. Motorcycles.
3. Mopeds.
4. Vans and trucks.
5. Trucks.
6. Trailers.
7. Microcars.
8. Quads.
9. Motorhomes.
10. Caravans.

            On the contrary, vehicles that are excluded or have special conditions for taking out this insurance are:

1. Vehicles with a long history of accidents.
2. Vehicles that transport dangerous goods.
3. Buses.
4. Passenger transport vehicles in public service.
5. Vehicles with special characteristics in terms of power, weight, type of use, etc.

• When daily insurance DOES make sense.

            There are several very common situations in which daily insurance is perfect.

1. Cars that are “idle” and only used occasionally.

            In my experience, I always come across fleets that have vehicles that are only used on certain dates or occasionally, for example, for events, parties, Christmas, a specific customer, etc.

            For example, at Christmas, transport, courier, and delivery companies are overwhelmed by demand.

            These vehicles are usually old or have high mileage and low residual value.

            In the case of individuals, this occurs when they have a second car that is rarely used, for example, a weekend car, a classic car, a vehicle belonging to a family member who no longer drives, etc., and which is only started a few times a year.

            In these cases, paying for full annual insurance may be inefficient. Daily insurance can be interesting when:

Ø      The car spends most of the year parked in our parking lot, garage, or private property.

Ø      You only use it for occasional trips or services, gatherings, family reunions, etc.

Ø      When you calculate what you would pay for several insurance policies for a few days a year, it doesn't add up to the cost of an equivalent annual policy.

2. One-off transfers: garage, MOT, or change of address.

            Another typical case: you need to insure your car just to take it to the MOT, the garage, or to move it to another city.

            Daily insurance is particularly useful in these cases:

Ø      You have a car that has been off the road for some time and you want to move it legally.

Ø      You need to change its address or take it to a buyer.

Ø      Your previous policy has been canceled and you are only going to use it for a day or two.

            In these cases, taking out an annual policy for just a couple of days may not make sense, so daily insurance is a logical alternative.

3. Buying and selling used cars.

            When buying or selling a used car, there is a delicate period:

Ø      The car changes hands.

Ø      The change of ownership is being processed.

Ø      The new owner does not yet have their final annual insurance policy.

            If the annual insurance policy for a car you want to sell has expired, you can choose to take out temporary insurance for weeks or months until you find a buyer.

            Daily insurance allows you to:

Ø      Drive the vehicle during those days with it legally insured in the new owner's name.

Ø      Avoid relying on the seller's policy, which may not cover you in the event of an accident.

            This is an interesting option to avoid taking risks or driving without coverage.

4. Private drivers who use someone else's car on a very occasional basis.

            Children who only drive their parents' car on vacation, relatives who come to stay for a few days and use the family car, etc.

            For example, children who only drive their parents' car on vacation or relatives who come to stay for a few days and use the family car.

            Instead of modifying the annual policy to include an occasional driver, which can significantly increase the price, daily insurance can cover those days when another person uses the car intensively, provided that it complies with the product conditions.

5. Classic cars.

            This type of temporary insurance can be a good option for owners of classic cars or for those who do not use their car very often, as they tend to drive it at very specific times of the year, for example, to participate in competitions or events. For those few days of use, it is more interesting to take out car insurance for months, weeks, or days.

6. If your company does not renew your policy.

            If this happens, your car cannot be left uninsured, so you will have to take out temporary insurance until you find another insurer with whom you can negotiate annual insurance.

7. If you travel abroad, you may need to extend your coverage.

            Keep in mind that the insurance policies you take out have certain conditions. One of these may be that the service you have taken out is not covered abroad. Therefore, if you are going to travel to another country with your car, we recommend that you take out insurance with extra coverage.

8. If you are transporting a new car or importing it into your country of residence.

            You also need, at a minimum, temporary insurance for the duration of the operation.

9. For vehicles with temporary license plates.

            Until the final registration is processed, they must be insured with this type of car insurance.

• When you should NOT consider daily car insurance.

            It is as important to know when to use it as it is to understand when it does not make sense.

1. If you use your car all year round, even if only occasionally, it does not make sense.

            If you use it relatively consistently, even if not every day, a traditional annual insurance policy will almost always be more cost-effective.

            For example:

Ø      You use your car every weekend or on holidays.

Ø      You take frequent trips.

Ø      You need it for your daily life several months of the year.

            In these cases, taking out several daily insurance policies can be considerably more expensive than a normal annual policy.

2. If you are a new driver and you are going to drive often, the most responsible and economical option in the medium term is.

            The responsible and economical option in the medium term for a new driver who will be using the car regularly is usually:

            Take out annual insurance that already covers your risk profile, even if it is expensive at first.

            Daily insurance may seem like a quick fix, but if used as a “permanent solution,” it ends up being expensive and, above all, is no substitute for planning for stable coverage.

3. If you want to “save money” by leaving your car uninsured on the street.

            Leaving a car parked on public roads without insurance, even if you don't move it, is a serious mistake.

Ø      You may have legal problems if damage occurs, for example, if the car moves on its own, catches fire, etc.

Ø      Penalties for lack of insurance can be high.

            Using daily insurance only when you are going to move it and leaving it uninsured the rest of the time is not a good idea.

            If the car is parked on public roads, it is wisest to have continuous insurance coverage.

• Requirements for taking out daily car insurance.

            The requirements that insurance companies in Spain usually demand for taking out temporary car insurance for individuals are:

1. Minimum age of the driver: usually 21 years old. Some insurance companies allow 18 years old, but this is not normal.
2. Length of time the driver has held a license: at least one year, although in some cases it is two years.
3. The license must be valid at the time of purchase.
4. Some companies require that the person purchasing the insurance be the owner of the vehicle.
5. The vehicle must have a valid MOT.

• How much does it cost compared to annual insurance?.

             There is no universal figure, as it depends on several factors for individuals:

1. Your age and driving experience.
2. The type and age of the car.
3. The area where you drive.
4. The coverage you purchase.  

§         Implications for fleet management.

            The main consequence is the cost savings of taking out daily insurance rather than conventional insurance for the whole year.

            The following measures are recommended.

1. Identify vehicles that are used a few days a year.

            In my experience, I always come across fleets that use vehicles a few days a year.

            The first thing is to know which vehicles are used a few days a year. If you use telematics, it is easy to find out by checking vehicle usage; if you do not use telematics, it is more complicated.

            In fleets with a single work center where there is a fleet manager, they usually know which vehicles are used a few days a year.

            It is more complicated in large fleets with several work centers. You have to ask each fleet manager at each work center which vehicles are used a few days a year.

            For example, I was working with a fleet belonging to a local council in Spain. There were 80 vehicles that had not been used in the last six years, and these vehicles were decommissioned.  

2. Calculate the difference in insurance premiums.

            You need to know the cost of insuring all vehicles for the whole year, the cost of insuring some vehicles for the whole year, and the cost of insuring some vehicles on a daily basis.

            For example, if the cost of insuring all vehicles for the entire year is 100 euros, the cost of insuring some vehicles for the entire year is 90 euros, and the cost of insuring some vehicles on a daily basis is 5 euros.

            The total cost of insurance is 95 euros, saving 5 euros per year, which is cheaper than insuring all vehicles for the entire year.

            It should be noted that if the vehicle is insured for the whole year, it can be used every day, so it is necessary to consider whether the saving of 5 euros compensates for the daily insurance.

3. Immobilization of the vehicle.

            If the vehicle has daily insurance, it is necessary to ensure that the vehicle cannot be used on public roads on days when it is not insured.

4. Vehicle value.

            In my experience, vehicles that are used for a few days tend to be older or have high mileage and low residual value; they are not usually new vehicles.

            In addition, daily insurance covers the compulsory civil liability required to drive legally.

            Therefore, it is recommended to take out daily insurance for vehicles that are older, have high mileage, and low residual value.

            Vehicles that are newer, have low mileage, and high residual value should be used throughout the year.

5. Check the coverage carefully.

            Not all policies offer the same guarantees.

            Make sure they include roadside assistance, legal defense, possible deductibles, and mileage limitations.   

6. Check the exclusions and requirements.

            Minimum and maximum driver ages.

            Years of driving experience required.

            Vehicles allowed: cars, vans, classic cars, etc.

7. Do the math before deciding.

            Calculate how many days a year you will actually use the car.

            Compare the total cost of several daily insurance policies with that of an equivalent annual policy.

8. Take out insurance on specialized and transparent platforms.

            It is important that the entire process is well documented: conditions, policy, proof of payment, etc.                

            You can use online brokers that allow you to quickly compare and purchase daily car insurance, viewing the coverage and price on screen before paying.

            In summary, if you are going to use the car frequently throughout the year and value more comprehensive coverage, it is more convenient to purchase an annual policy. If your use is going to be sporadic, daily insurance is better.

Slide 3. Thank you for your time.

            The class has developed what daily insurance is, when it is appropriate, and its implications for fleet management, see you soon.