The Pros and Cons of Getting Fleet Insurance and How to Lower Your Premiums

If your day to day business depends on a fleet and a pool of drivers, covering them under one insurance makes a lot of business sense.

This notwithstanding, businesses pay 30% more on their insurance premiums than private buyers do.

The principle here is that due to the hours and miles covered per day, business vehicles have higher risk factors.

What are the arguments on fleet insurance and how can your business get the best rates?

Advantages of Fleet Insurance

1. Convenience

Imagine having to take out and manage single policies for each vehicle on your fleet. This is time-consuming and tedious.

Fleet insurance gives you one policy. This means you have one renewal date to keep track of for your entire fleet. Also, there are no multiple payments for premiums.

2. Cost Effective

For an insurer, a fleet means more cars and more business.

For your business, this means you are in a position to negotiate impressive discounts.

One reason why you get a discount is that multiple vehicles average out the associated risks. This lowers your average spending on insurance, which is great for your business.

3. More Flexibility

Most fleet policies offer greater flexibility when it comes to vehicle use.

Instead of having to allocate a specific driver to each car, this policy allows any of your drive to drive any of the vehicles in your fleet.

This is a bonus for a busy business, and it also allows for flexibility when doing driver scheduling.

Disadvantages of Fleet Insurance

1. Higher Premiums

If you typically have young drivers 21-25 age bracket, your insurance premiums are likely to go up. Similarly, adding the ‘any driver clause’ will give your business more flexibility, but push your premiums higher.

2. Fleet vs premiums

While it’s true that you get higher discounts with fleet insurance, this is dependent on the size of your fleet.

If you have a small fleet, the discount is significantly lower and less attractive.

3. Policy Exclusions

Pay particular attention to the exclusions such as ‘private use of vehicles’. At times, this is excluded in vehicle fleet insurance policies.

This clause generally excludes the use of the fleet in a private capacity by employees, family and friends. If this part of your intended usage, then it disadvantages your business.

Getting Low Rates on Your Insurance Premiums

Each provider has its method of calculating and setting premiums. These figures are however not cast in stone.

Here are some steps to take in order to negotiate for lower premiums.

Enforce Minimum Standards of Driving

Good drivers cause fewer accidents. In turn, this results in lower premiums.

For a business, this means hiring the right drivers as well as conducting in-house training. This should include having extensive risk management measures in place.

As you recruit, keep in mind that drivers with convictions or penalties will escalate your insurance premiums. Read more on how to recruit the best drivers for your business.

Install GPS and Other Safety Functions

Installing GPS systems plays a hand in lowering your premiums. This is how:

  • It gives you accurate figures on miles travelled each week, which is considered in your premium calculation.
  • Prevents theft and allows you to track, locate and receive alerts on unauthorised use.
  • Automated vehicle maintenance schedules prevent breakdowns and costly emergency repairs.

Aside from trackers, installing alarms and immobilisers can help lower your risk as well. Any actions that lower your risk lowers your premiums.

Install Camera Technology

These are useful on several levels. One, they give you an idea of how your drivers operate on the road. This can form the basis of your in-house training curriculum.

Secondly, forward facing cameras provide valuable data on who is at fault in the event of an accident. This saves both your business and your provider time and resources.

Increase Your Excess

If you are particularly confident about your driver’s ability and safety incentives, this is the way to go. By increasing your excess, your premiums go down.

However, note that in the event of an accident you will pay higher to cover the excess fees per your policy.

Park Your Vehicles in a Secure Place

This applies for both central parking for a number of cars, as well as where your drivers pack when on the road.

Establishing safe parking areas and providing this information to your insurer can lower your premiums. This is because secure parking lowers your risk of vandalism and theft.

Risk Assessment

Your provider will have its own assessor to provide an ideal protection solution.

Work with your prodder to evaluate your risk, areas of improvement as well as drivers accident scene conduct.

Compare Insurance Quotes

While automatic renewal with your current service providers is convenient, it might be pricey.

When your policy is almost up, shop around for better deals. If you want to stick with your current provider, ask for their recommendation on what would lower your premiums following a renewal.

In The Long Run

Though fleet insurance with the various opt-ins can be expensive, the protection and peace of mind it gives you is invaluable.

By using best practice with your drivers and fleet maintenance, you can negotiate for lower rates and significantly lower your overheads.

Adam Hansen

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