The Complete Guide To Fleet Vehicle Insurance

Fleet vehicle insurance plans are a type of insurance that is designed to provide coverage to a fleet of vehicles. These insurance plans provide you with various coverage options, including liability coverage in case of accidents. You can also select comprehensive coverage plans that provide coverage to your vehicle in various situations like fire damage or theft. 

Fleet vehicle insurance schemes often cost compared to insurance costs for an individual vehicle. This is because the insurer can spread the risk across multiple vehicles. In addition to reduced costs on premiums, these insurance schemes also offer several benefits and services to insured businesses, which may include driver training programs, risk management support, etc. The motive behind these services is to help businesses reduce the overall risk and their insurance premiums over time.

What is Fleet Vehicle Insurance?

Fleet vehicle insurance is a very convenient method of covering the insurance of multiple vehicles under one policy. Typically, these plans cover Liability, collision, and comprehensive coverage, which are just a few of the many coverages included in this kind of insurance.

One of the benefits of getting this type of insurance is that you can negotiate the premium costs to suit your budget (many insurance companies offer discounts to larger fleets), as it can help reduce the overall insurance cost.

Before setting out on the road, vehicles of a commercial fleet are required by the Federal Motor Carrier Service Association (FMSCA) standards to obtain fleet insurance.

Why is Fleet Vehicle Insurance Critical?

Fleet vehicle insurance is essential for several reasons, including:

• Financial Protection: In businesses with high-risk factors, like trucking and hauling, having the right insurance is a very important factor that contributes towards smooth business operations. Fleet vehicle insurance provides you with financial protection against heavy expenses in the case of an accident.
• Legal Compliance: As per FMSCA standards, all hauling and trucking companies need to acquire auto insurance. Failure to comply with these requirements can result in fines, penalties, and legal action.
• Protecting Your Employees: Fleet vehicle insurance protects your vehicles and your employees. Insurance covers the cost of damage to the assets, which otherwise would be deducted from your employees, thus saving them from financial ruin.
• Peace of Mind: With fleet vehicle insurance, you can know that the expenses of your vehicle and drivers are covered in the case of an accident or other unforeseen circumstance.

What types of Fleet Insurance can you choose from for your Fleet?

Let’s break down each policy type so you can easily understand their coverage and decide which policy suits you best.

Fleet Vehicle Insurance Form

• Liability Insurance

Liability insurance is one of the essential types of fleet vehicle insurance. This insurance protects you against losses caused by damage to other people’s properties by your driver while driving the insured vehicle. It covers various fees, such as medical bills, property damage costs, etc. In most parts of the United States, liability insurance is mandatory to keep your business protected from unwanted expenses.

• Physical Damage Insurance

Physical damage insurance will pay for the repairs and replacements of parts of all types of damages in an accident or an insured event, such as theft or vandalism. This type of insurance can be very beneficial if you own a fleet of expensive motor assets that would be really expensive to replace. 

• Collision Coverage

This type of insurance is required if you frequently lease your vehicle. Collision coverage pays for all kinds of physical damage to your vehicle due to a collision with any other vehicle or an object. 

• Comprehensive Coverage

Comprehensive insurance protects your vehicles from insured events that don’t include collisions, such as theft, vandalism, or weather damage. If your fleet operates in a weather zone where blizzards and cyclones are everyday events, this type of coverage can protect your fleet from various perils. 

• Uninsured or Underinsured Motorist Coverage

If your driver or vehicle is involved in a crash with an uninsured driver, uninsured motorist coverage has got you covered. Costs that are not covered as the other driver is uninsured, such as medical bills and vehicle repairs are all covered by this package. 

• Cargo Insurance

If your fleet is in the hauling business, where you have to move around a lot of raw or finished products. Cargo insurance safeguards the cargo being carried on your vehicle in the event of theft, damage, or loss. Furthermore, cargo insurance saves your business from legal action that may arise because of the cargo you are carrying.

• General Liability Insurance

General liability insurance is a comprehensive insurance plan that protects your company from various peril, such as property damage, medical expenses, and legal expenses. 

Factors Affecting the Cost of a Commercial Fleet Insurance

For you as a business owner, protecting your fleet’s assets and reducing financial risks is paramount. However, fleet insurance prices depend on several variables and can vary significantly.

• How extensive your fleet is: The larger the fleet, the higher the premium. The size of the fleet is an essential factor in deciding premiums because a more extensive fleet would incur more risk of events like accidents, theft, and other such incidents. 
• The age and condition of your vehicles: The cost of insuring your fleet against risks is primarily determined by the age and state of the fleet. E.g., As newer or well-maintained vehicles have a lower chance of mechanical failures or breakdowns, the probability of these vehicles being in an accident decreases, resulting in lower premiums when compared to old and outdated vehicles. 

• The types of vehicles in your fleet: The cost of fleet insurance also depends on the kind of vehicles in your fleet. Vehicles like trucks and buses are more expensive to insure due to the high risk of damage or theft. Whereas insurance costs for passenger cars and vans are typically lower.

• The driving record of your driver: The driving records of the drivers you employ also significantly impact the cost of the insurance. If your employee is involved in traffic violations or accidents on multiple occasions, they are classified as a high-risk driver, and the cost of your fleet insurance will rise.

To avoid this situation, protect your business reputation, and promote safety in your fleet, it is important to instill some defensive driving skills in your drivers. You can learn more about the tips for defensive driving that truckers must know by reading this article

• The Purpose of Your Vehicles: The intended use of your vehicle also impacts insurance costs. The insurance premium will rise if you use your vehicle to deliver hazardous materials or employ your vehicles in construction.

• Your claims history: Your claims history also significantly impacts the cost of your insurance. If you submit your claims frequently, the insurer might evaluate you as a high-risk client, increasing your insurance premium. 

• Coverage amounts you choose: The coverage limits you choose impact the amount to be paid as the premium. Lower coverage limits would mean lower premiums, whereas higher coverage limits would incur a higher premium. Selecting the right coverage amount to protect your vehicles is critical. 

Buying a Fleet Vehicle Insurance

How Much Can Insurance Cost?

The cost of insuring fleet vehicles can vary widely and depends on several factors, including the size of the fleet, the types of vehicles, the experience and driving habits of the drivers, the level of coverage, and the insurance company’s rates. Therefore, it is only possible to provide accurate average costs for fleet insurance by knowing specifics about a particular fleet.

According to a 2021 survey by Insureon, the average annual cost of commercial auto insurance for small businesses in the United States is approximately $1,281 per vehicle. It’s important to remember that this average cost is for one vehicle only; fleet insurance can be more expensive due to the higher risk associated with managing a more extensive fleet.

Steps to Buying Insurance

Step 1: Assess Your Fleet Insurance Needs

Before you start looking for insurance coverage, you need to determine your insurance needs. You have to decide on what type of insurance you require, how much coverage you will require, and what risks you plan to protect your fleet from. Meet your insurance agent and take their help in making these decisions. 

 Step 2: Find a Fleet Insurance Provider 

Once you have determined your requirements, it is time to find an insurance provider. Many insurance companies sell fleet car insurance, and you will have to do some research to find the company that best suits your needs. When deciding on an insurance company, consider factors like pricing, coverage options, and reputation.

Step 3: Gather Information About Your Fleet Vehicles

In order to obtain an accurate quote for fleet insurance, you have to provide complete information on the fleet. You must list your fleet’s total number of vehicles and their make, model, year, price, and primary purpose. This information will help insurance companies assess the fleet’s risk and provide you with a quote for your premium.

Step 4: Get Quotes

Once you have gathered all the necessary information, it is time to request quotes from different companies. Before accepting a quote and purchasing insurance, you must read all the documents carefully and clarify any doubts. You should obtain quotes from at least three or more insurance companies to get the best price. 

Step 5: Review and Purchase Your Fleet Insurance Policy

After you’ve received quotes and compared coverage options, it’s time to review and purchase your policy. Be sure to read the policy’s fine print carefully and understand the terms and conditions of the policy before signing. Once you’ve purchased your policy, make sure to keep a record of it and review it periodically to ensure that you have adequate coverage.

How to Reduce Your Fleet Vehicle Insurance Costs?

Fleet insurance costs can add up, especially if you need to take the time to shop around for the best deals or take steps to reduce costs. We present some suggestions for lowering the cost of insuring your fleet.

• Look around to find the best deals: When it comes to fleet insurance, some companies outperform others. Spend your time researching and comparing the various quotes. Consider factors such as coverage limits, deductibles, and policy exclusions while comparing the quotes. This guarantees that you are getting the most bang for your buck. 
• Maintain a good driving record: The driver’s driving tendencies can severely impact the insurance cost. You must expect a higher insurance rate if your driver has a history of accidents or traffic violations. To reduce these costs, you must emphasize safe driving behaviors among your drivers and monitor their records. 
• Implement safety features in your vehicles: Insurance providers appreciate when companies take precautions to reduce risk. Accidents, theft, and vandalism can be prevented or minimized by installing safety features such as GPS tracking systems, rearview cameras, and anti-theft devices. Insurance providers are more willing to provide lower insurance premiums when they see you taking proactive measures to minimize risk.
• Increase your deductible: You assume more risk when you choose a higher deductible which means your insurer takes on less risk. This results in your premiums being lower. However, you need to weigh the cost savings against the increased financial burden of a higher deductible.
• Review your policy regularly: Your insurance needs to change as your business evolves. It’s important to periodically review your fleet insurance policy to ensure it meets your needs. You may be able to negotiate lower premiums if, for example, your fleet has downsized. Likewise, you might need to change your coverage limits if you’ve acquired more vehicles or expanded your operations.

In conclusion

Fleet vehicle insurance is an essential investment for businesses that rely on a fleet of vehicles. It protects against various risks, such as accidents, theft, and vehicle damage, which can result in significant financial loss and disrupt business operations.

Businesses can have peace of mind knowing that their vehicles and drivers are protected and that they plan to deal with any unexpected events with the right insurance coverage. However, it’s essential to carefully consider different insurance options and work with a reputable insurer to ensure that your fleet is adequately protected and that you get the best value for your insurance investment. By doing so, businesses can protect their bottom line, maintain their operations, and safeguard their reputation in the marketplace.