What Factors Do Fleets Need To Consider When Taking Out Insurance?

October 29, 2021
Advice, Automotive

Fleet managers have a lot on their plates. It’s not as if managing a fleet of cars wasn’t hard enough; they also have to keep things running smoothly and ensure safety for all. Getting insurance coverage for your fleet business is one of the most important measures you can take to protect yourself from any unexpected losses, but there is much you need to understand before you can make a final decision here.

Getting insurance for your fleet is a must, and it would make more sense for you to get collective coverage for all of your cars at once since that will be more economical. But you need to know how to make a favorable deal for your fleet so that you don’t end up buying an overly expensive policy. You can lower the insurance premium by slashing down any risk associated with your fleet, but that is easier said than done.

In this article, we’ll discuss the most important considerations for you when taking out insurance for your fleet business.

#1) The Cost Of Your Insurance Policy

The first and foremost thing to consider when getting motor fleet insurance for your business is how much will the whole thing cost you and whether or not you can afford the policy. The insurance coverage for fleet businesses is not the same as getting auto insurance in general; in this case, the policies are highly specialized.

The type of fleet, number of vehicles, the track record of your workers, the risk factor, and other details all factor in when deciding the cost of your insurance coverage. For your reference, here are a couple of comparisons:

  • Service fleets are cheaper to cover as compared to delivery fleets
  • Van-based fleets get costlier insurance premiums than car-based
  • Larger fleets are also more expensive to cover

If your fleet vehicles deliver stuff, you’ll have to pay extra to cover the stuff being delivered.

But of course, just because your fleet is costlier to cover, in theory, does not mean that you should settle for the first insurance policy you come across. You have options, do some research about how the insurers calculate your premium, the factors involved, and what you can do to lower the costs.

Then compare the rates of several insurance companies, after that, you can finally make your decision.

#2) The Role Of Business Risk Levels

You should then begin collecting all the information, data, and stats you can for your business to assess the risk level of your setup. The idea is to compare your risk factor with the industry standard, identify the major issues, and then work towards solving those problems and lowing the risk level.

Your goal should be to get access to as much (highly detailed) data as possible. By assessing the risk for your business, you’ll be able to get accurate estimates for the insurance cost to cover your fleet. Plus, you’ll be well informed about your situation and thus be able to judge if a scheme is too expensive for covering your fleet.

You need to be able to show the insurer where your company stands, where it’s headed, what are the possible risk levels you face, and how you have managed to minimize them.

#3) The Performance Records Of Your Drivers

This is perhaps the most important factor of all – your insurance premium will shoot up if you hire irresponsible drivers who have a poor track record. The more responsible and professional your drivers, the lower the risk factor, and thus you’ll get an affordable insurance premium.

You need to tell your drivers what their responsibilities are in this regard, what you expect from them, and what is at stake. Use fleet tracking systems to better monitor the on-road behavior of your drivers and make sure they go through the pre-ride and post-ride inspections.

Also, if there are any restrictions set in place by the insurer, be sure that you comply.

#4) Is Your Fleet Perfectly Secure?

The insurer will want some assurance from your end that your fleet is safe and that you only want to get insured for the rare possibility of getting involved in an accident. If there are any security risks for your fleet, i.e., a poor accident record, troubled history with maintenance issues, and so on, you’ll have some trouble.

Some insurers will insist on applying overnight parking restrictions, which means that you’ll have to ensure that your vehicles are parked on a safe, secure, and locked premise every night. The better the security arrangements and safety protocols, the more confidence you’ll exude in the deal.

If your insurer has some specific security concerns, such as having the car keys off-site and put in a locked safe during the off-hours, be sure that you comply.

This will surely help you get a better deal.

#5) Always Look For Discounts & Concessions

Not all policies are the same, you need to pick the one that works the best for your business, but most of all, you need an affordable option. You can secure discounts and concessions from certain insurers if you set up dash cams and fleet tracking systems in your fleet vehicles which will let you better monitor them and help the insurance company better assess the validity of your insurance claim.

Telematics software is most welcome for insurance companies; also, be sure to look up other ways to secure discounts so that you have to pay an affordable sum.

Bottom Line

Insurance is a business necessity in this climate of uncertainty and risk. Hopefully, you now understand what you can do to keep the premiums low and your fleet secure at the same time. Since fleet insurance is an integral part of your flee safety assurance plan, you need to do your homework first to get the best deal. Don’t dive into the matter without knowing the full extent of things; instead, do your research first, explore the options, and then make a decision.

Getting insurance for your fleet vehicles is not something you can skip or ignore but ending up with an inadequate policy or a very expensive one will be worse than not having insurance in the first place. Just follow the tips and recommendations that we shared in this article, and hopefully, you’ll be able to keep your fleet rides perfectly safe throughout.

Good luck to you!