Fleet insurance happens to be one of the most effective options for insuring several vehicles under one policy. Business owners can insure multiple vehicles efficiently and in a tailored way with fleet insurance. Simultaneously, they can eliminate the dependence on individual policies. This particular policy variant is convenient for organizations operating a fleet as it,
- Decreases the number of policies to track, simplifying the tasks of the administrative staff
- Eases the chore of adding or removing vehicles to the insurance policy resulting from business scaling
- Makes adding drivers to the insurance policy simpler because they are consigned
- Lets businesses provide insurance coverage to all drivers of all vehicles or delegate specific fleet vehicles to specific drivers
Researchers from the NIOHS say that on-the-job collisions forced employers to spend $39 billion in the USA in 2019. To avoid such situations, having an all-inclusive fleet insurance policy, along with a fleet vehicle GPS tracker, is mandatory.
Things Covered by Insurance
According to Global Fleet, almost 8.1 million cars and trucks in the USA belong to the “fleet vehicle" category, with fleets occupying more than five automobiles. It amounts to around 3% of the total number of vehicles plying on the highways and byways of the nation. The presence of so many fleet vehicles and other types of automobiles on the road increases the possibility of collisions. Every driver should be covered under an insurance policy to ensure behind-the-wheel safety.
Below you will find the descriptions of the two primary components of commercial vehicle insurance coverage.
This insurance covers physical injuries and property damage to third parties involved in an accident. Therefore, if one of your drivers causes the collision, automobile liability will cover the medical bills of the other party and property reconstruction or provide full or partial replacement.
Automobile Physical Damage
It refers to damage done to the vehicle you own after a collision or other mishap. Usually, there is a choice between a basic package and something more inclusive that covers other damages.
Fleet Insurance Pocket Pinch
Determining the exact price of fleet insurance is challenging as there is no flat rate. However, a few factors can affect expenses. You will find a breakdown of those aspects below.
- The Industry
There are a few industries very popular for exhibiting risky driving habits, such as taxi service providers, couriers, and personal drivers. They belong in this category because they have to adhere to strict time factors. These organizations get higher insurance premiums as the punctuality of their drivers dictates their performance.
- The Vehicle Type
The vehicle you drive determines how much you must pay for insurance, just like conventional vehicle insurance. A few attributes affecting insurance costs include annual mileage, vehicle age, and the location the driver will take it to and park after use.
- The Number of Vehicles
Generally, insurance costs go down if the number of vehicles in the fleet goes up. This adds to the difficulties of small businesses with small fleets to reduce insurance premium costs effectively.
- Old Collisions or Claim Histories
Whenever you get in touch with a new insurance provider, you will have to show your fleet insurance history. You also have to disclose any collisions that have occurred in the past or claims you may have submitted. The insurance cost may surge if these instances are significant.
- The MVR
MVR is the abbreviated term for Motor Vehicle Records. Many fleet companies have to ensure their drivers update their MVR every few years. This record contains events, including collisions, moving violations, suspensions, criminal charges, etc. Insurance premiums may increase if the drivers have a history of rash on-road behaviors.
- The Location
Fleet companies operating in cities with many drivers may have to pay more insurance costs. Operating in rural areas, on the other hand, is not as risky as there are not many drivers on the road.
- Any Deductibles
It is assumable that a higher deductible will ensure the cost of insurance premiums remain low.
Guide to UBI
UBI or Usage-Based Insurance, also called pay-as-you-drive or telematics insurance, is calculated depending on the habits of the drivers. When you use a plug-and-play device, such as an ELD, OBD tracker, mobile app, or OEM, data is accumulated to determine the driving tendencies of the fleet. It includes data about rapid acceleration, rash driving, distracted driving, unsafe braking, and sharp turns. Insurance providers will go through this information and use it to ascertain the price of a policy that accounts for the fleet's operational safety. You will get the benefit of more savings if your drivers perform optimally behind the wheel.
Ways to Cut Fleet Insurance Costs
Even with various factors contributing to higher insurance rates, you can keep your expenses down and ensure that you don’t spend a penny more than necessary on fleet insurance. Here are a few effective ways to lower fleet insurance costs.
Drivers’ Room for Improvement
Consider using driver scoring systems to identify where drivers can improve. This strategy also helps you determine which drivers require advanced training. The presence of certificates and other similar documents achieved after completing training courses will help bolster the fleet manager’s commitment to safety and effective driving from the viewpoint of an insurance company.
The presence of connected car systems can help you accumulate data from fleet vehicles, which, in turn, will allow you to save money on insurance. Telematics devices and associated software programs gather info about driver safety that you can supply to the insurance provider. In doing so, you can prove that you operate your fleet safely and cut down expenses. This insurance calculation method is suitable for usage-based insurance.
Selecting a Provider of Fleet insurance
Insurer selection tends to be time-consuming, but it is highly personal. The experience is also customizable. So, it differs from one business to another.
Here is a list of how you can secure the perfect fleet insurance plan for your organization.
- Familiarize yourself with the data and how you compare to facilitate the estimation process. When you benchmark yourself against other companies, you get an idea of where you stand in terms of operating safely. It will let you determine the kind of situations you should get insured for. From there, you should be able to create a checklist of everything you should look for and questions you must ask while exploring your options.
- Prioritize insurers offering add-ons that may prove valuable to the fleet. Here are a few of those extras worth considering.
- Higher liability coverage
- More coverage for physical damage
- Coverage for roadside assistance
- Product insurance for the assets in transit
- Coverage for uninsured motorists
Look for insurance firms that reduce premiums on no claims or shift to UBI programs.
- Those who have never made an insurance claim earlier should look into insurance providers offering discounts for clean driving records.
- You should also ask insurers if they offer UBI policies so that you can use safe driving data to reduce insurance rates.
Fleet Insurance Policy Management
There is more to selecting a fleet insurance policy. After picking the one that you believe will be suitable for your business, you must pay attention to a few other aspects for as long as the policy lasts.
The insurance agent you work with should be able to create a plan that suits your needs in every way. Payment plans primarily depend on how much flexibility you require and the type of insurance you select. The policy length may also play a dictatorial role, but in most instances, the contract lasts one year. Payments take place through automatic bank withdrawals, money orders, cheques, or credit cards. Here are the three most common payment plans in the insurance industry.
- One Upfront Payment
This one is often the simplest choice when the insurance policy is transparent and does not allow any changes throughout the term. Paying upfront further ensures there will be no monthly service charge. As a result, you get to save some money every month.
- Three Equal Payments
Paying three times a year makes things more flexible. This option is suitable for you if you don’t want to deal with the stress or fees of monthly payments and don’t want to pay a one-year upfront fee, either.
- Monthly Payments
Normally, insurance providers charge a service fee or interest when their clients opt for monthly fleet insurance payments. Then again, monthly payments are suitable for businesses in need of flexibility or can’t invest in year-long policies at the beginning. If you have to cancel the policy, you will not have to wait to get the prorated amount for the rest of the contract refunded. The insurance provider will just cancel the remainder of the monthly payments.
When going through the particulars of the policy with the insurer, you will notice that it includes contract length info and when you must renew. Most policies renew annually, but you can change it to monthly or semi-annually if you think you will benefit from the extra flexibility.
You may require additional coverage you did not have in your policy originally as you continue your work throughout the year. There are several additives you can include in your policy. Nonetheless, here are a few fundamentals.
- Upset or collision coverage
If a vehicle in your fleet is in a crash with another and your driver causes it, collision coverage will pay for your repairs or replacement. In most commercial auto policies, you have to shell out money to cover the damages if it causes a collision.
- Comprehensive coverage
This additive protects the vehicle from damage resulting from natural disasters, such as an earthquake, a tornado, severe snowstorms, or hailstorms. It even provides coverage from theft and vandalism. Comprehensive coverage is an addition that deserves your attention, especially if you operate out of a geographic zone with intense weather conditions or a high crime rate.
- All perils coverage
As you can guess, all perils coverage is for all potential scenarios. It is akin to a combination of collision coverage and comprehensive coverage.
- Specified perils coverage
This additive should be your choice if you need coverage for something specific. For instance, if you need coverage for only the engine, it will fall under specified perils coverage.
How Vyncs Can Help
Vyncs is more than just a provider of a fleet vehicle GPS tracker. From location tracking to driver safety monitoring, we can give you insights on just about everything. Vyncs leverages powerful onboard and in-cloud distributed data management and analytics platforms to access vehicle sensor data and provide valuable intelligence.
As a leading connected car solution provider, we have experience analyzing vehicle sensor data and blending the same with contextual data to enhance the mobility experience.
However, that does not mean we can’t help you with savings. The fuel-related information that we provide, for instance, will help you reduce consumption and save money and fuel while preserving the environment. We can also help you utilize telematics data to cut down insurance costs and promote safe driving.