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What are the pros and cons of fleet insurance?

ByDave Stopher

Jun 15, 2021

Any business that owns and insures multiple vehicles should consider insuring all of them on one policy. This is called fleet insurance, and there are pros and cons to consider before signing up for this type of policy. This article will discuss these in-depth to help you decide whether or not it makes sense to buy a fleet policy for your business.

As each business is unique, the pros and cons will apply in different ways. Regardless, it can be convenient to keep all of a business’s vehicle coverage under one policy instead of having multiple policies to manage. Plus, fleet policies usually offer attractive discounts.

Let’s look into the pros and cons of a fleet insurance policy.

Pros

  • With fleet insurance, all of your vehicles will be insured through one policy. This means you have one point of contact for claims and enquiries with regards to all of your vehicles. It also simplifies tracking your insurance documentation and the contact details for your insurer.Additionally, there is only one renewal date. This helps business owners avoid missing a renewal or a premium payment. 
  • Fleet insurance companies offer discounts depending on the number of vehicles being insured. The more vehicles you are covering, the higher per vehicle discount you’re likely to receive. The discounts are most beneficial for companies with 5 or more vehicles on the books.
  • One type of fleet insurance called ‘any driver’ cover permits any driver you employ who meets the criteria of the policy (may be limited by age, prior driving offences, etc.) to be covered behind the wheel of your vehicles. This is particularly useful for companies that have high employee turnover since on an ‘any driver’ policy you wouldn’t need to inform your insurer of a new driver, so long as the policy critieria are still met (e.g. with regards to driver age).
  • No claims discounts can be applied to fleet insurance, saving money (assuming your drivers don’t cause any accidents that result in a claim)

Cons

  • Fleet insurance may not be beneficial for some smaller fleets in the 2-5 vehicle range. Smaller fleets should still get a per-vehicle discount, but the savings will be smaller than compared to a larger fleet. Owners of smaller fleets should compare the costs of fleet cover versus insuring each vehicle independently. 
  • A business with drivers under-21 or under-25 will pay more for fleet insurance, and this can noticeably affect the cost of an ‘any driver’ policy in particular. This is because ‘any driver’ policies don’t check the credentials of individual drivers, and young drivers are statistically more likely to get in an at-fault accident that results in a claim.A business employing staff under-21/under-25 can still consider fleet insurance, but it might be worth keeping younger staff on their own individual insurance policy and keeping them to one lower-value vehicle in order to save money on your fleet cover. While this does result in more paperwork and admin, it can lower overall vehicle insurance costs.  
  • Fleet policies will all have certain exclusions, so it’s critical to read the fine print. For example, there could be a restriction on using fleet vehicles for private/personal travel. If that’s the case, any staff using a vehicle for personal use could invalidate the policy. If you have any doubts about what kind of driving is covered, check your certificate of insurance and ask your insurer if you still have questions.

When is fleet insurance better than individual insurance?

The more vehicles being insured, the more a business can typically save with a fleet insurance policy. With more vehicles, the risk of an accident is spread out. Plus, insurers offer larger discounts to secure business. 

A primary benefit of fleet insurance is having one renewal date and one point of contact if you ever do need to make a claim. This is particularly true for businesses with a large number of vehicles.

A fleet policy can also make the claims process easier. For example, different insurers have different claims processes. You’re less likely to make a mistake in the process if you have one process to understand and follow, versus keeping track of the claims process for multiple insurers. And a mistake can lead to a claim being denied. 

In conclusion, fleet insurance can be a solid choice for businesses looking to secure a per-vehicle discount on their insurance coverage. It’s also beneficial for anyone who likes the idea of having to deal with just one insurer for renewals and claims, instead of tracking multiple policies across their fleet of vehicles.