Fleet Insurance: What To Consider When Choosing and Managing Vehicle Insurance

There are around 12 million vehicle accidents in the US, according to the data for 2019. Out of these 12 million accidents, almost 6 million accidents were of commercial vehicles. Insuring commercial vehicles is far more important and complicated than one can imagine. Owning a business that involves the use of cars, there are great fleet insurance policies to protect your business and the people who run it. But there are a few things you need to know before getting fleet insurance. 

From getting the right coverage to knowing every important detail about the insurance policy and getting the right price for it, this article will describe everything you need to know to make a smart fleet insurance purchase. It does not matter if you run a small family business with just three vehicles or a large business with dozens of vehicles, this article will help you make the right insurance purchase. 

Fleet Insurance: What Makes it Different? 

What’s the difference between a normal auto insurance policy for your car or truck and fleet insurance that’s used commercially? While the coverage of both general insurance and fleet insurance is very same, the differences are subtle, but they are there. Let’s look at what fleet insurance is and what it covers.

The first advantage of having fleet insurance is cost. Getting commercial car insurance for each vehicle will take the cost to astronomical heights because commercial car insurance policies are very expensive. It is not a smart move to insure individual cars with individual policies. Not only the cost, but the process of managing your fleet and making a claim becomes extremely complicated. 

What makes fleet insurance policies so good is that your entire range of business vehicles is grouped under one fleet and one insurance policy will be applicable for all the cars. It is highly unlikely that all your vehicles will get in an accident at once. Fleet insurance reduces cost and makes the process of insurance claims easier. If you want the lowest cost coverage for your commercial vehicles, then fleet insurance is the one to get. 

What Fleet Insurance Covers

Coverage is the most important aspect of car insurance, along with the cost. There’s a misconception about the coverage of any commercial auto insurance coverage, including fleet insurance. Commercial and general car insurance policies are almost identical in terms of coverage, with only minor differences. Here’s what fleet insurance covers:

Liability Coverage 

Every state in the US (except for New Hampshire and Virginia) requires vehicle owners to have liability insurance coverage that will pay for the cost of repairs of the car and the medical treatments of the injury of the other driver. A liability insurance policy is not for the policyholders, but it can be claimed by someone else who gets in an accident caused by the policyholder. 

There are three components to a liability insurance policy. Each of these components has a specified coverage limit that says how much the insurance company will pay. In Fleet insurance, there is only a slight difference from general liability insurance coverage. 

Bodily Injury Liability: Bodily injury liability is the coverage amount the company will pay if any vehicle in your fleet will injure someone else in a road accident. It covers the cost of medical treatments and other costs incurred due to the accident (the other costs depend on the insurance company’s policies)

Property Damage Liability: Property damage liability is the amount the insurance company will pay to cover the cost of repairs to someone’s property for the damage caused by your fleet’s vehicles in an accident. 

Combined Single Limit: CSL is the total amount the insurance policy will give for both bodily injury and property damage liability. 

So what makes fleet insurance different from general insurance? It is the coverage limit. Every state has its liability insurance coverage limit. This is the minimum amount of coverage every policyholder must have. But for commercial insurance policies, this amount is usually very high, to cover the legal and other management costs. 

Where general insurance policies have coverage ranging from $100,000 to $300,000, fleet insurance policies’ coverage usually starts from a million dollars. The same is true for commercial collision and comprehensive insurance policies. The coverage is almost identical to general auto insurance policies, but the coverage limit is very high, and so is the cost and insurance premium. 

How Much Does Fleet Insurance Cost?

Asking how much does fleet insurance cost would be like asking how much a commercial vehicle does a person have? There is no one-price-for-all when it comes to any auto insurance policy, and the same is true for commercial fleet insurance. There are so many factors that will affect the cost of fleet insurance. These factors are: 

Size of Fleet: The most impacting factor in deciding the price of the fleet insurance is how many vehicles are in your fleet. Large-scale businesses with an enormous fleet of over a hundred vehicles will cost more to insure than a small business with just 5 vehicles. More vehicles equal higher costs. 

Age and Type of Vehicle: Not just the number of vehicles, but what type of vehicle and how old the vehicles are will determine the price of the insurance policy. Newer and more expensive vehicles are most expensive to insure, while larger trucks are more likely to be in an accident while causing and sustaining more damage. 

Apart from these two, multiple factors will affect the rate of fleet insurance, and these factors depend on the insurance company. The company might consider:

  • The mileage of fleet vehicles 
  • The type of business 
  • Why the vehicles are used
  • Parking place of the fleet vehicle
  • Condition of the vehicles, etc. 

Choose the right fleet insurance to protect your business and save yourself a lot of money.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.