Lots of businesses use a fleet insurance policy to cover all their vehicles on a single policy.
It is far less hassle than having individual policies with different renewal dates, separate no claims discounts and just one or more named drivers per vehicle. In the medium term, many businesses reduce their insurance costs with a fleet policy and the cost savings can stack up to quite large amounts.
Read on to find out how fleet insurance policies work, their benefits and how to switch to one.
You may have heard of “multi-car insurance” for your personal cars, sometimes used by couples who have a car each.
Fleet insurance offers a similar deal for commercial vehicles including cars, vans and HGVs. Instead of insuring each vehicle separately, a fleet insurance policy covers all your business vehicles as a group.
To get a fleet policy, your business must have three vehicles or more. They do not need to be all vehicles of the same type. You could, for example, have a company car and two vans on a fleet insurance policy, or even HGVs.
Fleet insurance is easier to keep track of as you will only have one renewal date and one policy to worry about.
With a fleet insurance policy, all your vehicles can be insured for anyone to drive them, with your permission. These are called “any driver” options, and the only thing you have to specify is whether this covers drivers over the age of 21, 25 or 30 – the younger the drivers, the more you will pay.
This is a huge benefit for some businesses. It makes it easy for you to use temporary drivers, have employees swap their usual vehicles, or get new staff up and running immediately with no change to your insurance.
There’s no need to keep updating your drivers’ details on a fleet insurance policy, such as their ages or points on their licenses, because they are insured as a group.
Your vehicles do not necessarily have to be insured to one single address. This can be a real benefit of fleet insurance if you need to move vehicles to different depots.
Some insurers do require overnight postcodes, however. The amount you pay will be affected by the level of flexibility you need.
Vehicles can easily be added or taken off your fleet insurance policy throughout the year.
If you are a growing business, you will be able to add vehicles to your fleet insurance as you grow. The benefit is that they will be added at the same vehicle rate as the rest of the vehicles on your policy. This usually works out cheaper than buying new individual policies for new vehicles when you haven’t built up a no claims bonus (NCB) or no claims discount (NCD).
If you have one or two minor accidents on a single commercial vehicle policy you will lose 1 or 2 years of your no claims discount. This will more than likely increase your renewal premium.
On the other hand, if you were on a fleet policy you would see a minimal change in your premium as a result of the accidents.
The number of vehicles in your fleet will have the greatest impact on your fleet insurance premium.
Other factors that affect how your fleet insurance is calculated will include what your vehicles are used for, the types of vehicles you have and your fleet’s claims history. Each driver will also have their own risk profile, which will be taken into consideration. Some insurers also consider the amount of time your vehicles spend out on the road when calculating fleet insurance prices.
For the vast majority of businesses, fleet insurance works out cheaper than individual policies in the medium to long term. In general, the more vehicles you have, the more you could save.
For some businesses, fleet insurance isn’t actually cheaper for the first couple of years. For these companies, the initial benefits are the flexibility to switch drivers between vehicles, and the convenience of a single policy and renewal date.
Over the longer term, savings can build up, especially for businesses that are adding more vans or cars to their fleet and want to benefit from the percentage of no claims discount acquired on the vehicles they already have.
Every business is different, and the best way to get a clear idea of the financial effect of switching from individual vehicle insurance to a fleet policy for your particular business is to talk to an insurance broker with solid experience insuring commercial vehicles.
Some insurers already offer flexible premiums month by month. This means the amount you pay for your insurance, in monthly instalments, can fluctuate up and down based on how much your vehicles are used. This type of cover is linked to vehicle tracking hardware, so the insurer can monitor how much your vehicles are driven.
Some insurers are looking into vehicle usage in more detail, to see if they can personalise your premium pricing based more closely on how much your vehicles are used, where they go and how they are driven. This is an emerging area in insurance pricing and it’s likely there will be new insurance products and new pricing structures offered over the coming years.
Firstly, you should make sure you don’t lose any no claims discount you have built up on any of your vehicles.
A good insurance broker can transfer your no claims discounts from your previous individual vehicle policies over to a new fleet insurance policy. They can do this even if the other vehicles are insured with more than one different insurer. The result is that your pool of vehicles, and any new vehicles you buy, will all benefit from the no claims discounts built up on some of them.
Insurers tend to drag their feet in sending over the necessary paperwork to make this happen, so the persistence of a good broker in getting all the documents in time can be a real benefit.
As an Appointed Representative of Joseph W Burley and Partners Ltd we have access to over 120 insurers and will search the markets for you to ensure we obtain a competitive price for your fleet insurance policy.
The sales team at Burley can help you switch from individual policies and make the change easy.