As the number of vehicles increases within a business, managing insurance policies can become challenging. Insurance providers offer a solution that makes insuring any number of vehicles a lot simpler in the form of fleet insurance.

While the specifics of every premium will be specific to an individual business, here is a basic overview of how fleet insurance works:

What is fleet insurance?

Businesses have a legal obligation to insure every vehicle used within their organisation. There are various types of cover, and insurance policies can vary depending on the vehicle, how it’s used, who it will be driven by, and so on.

Trying to arrange separate policies for each vehicle can quickly become a time consuming and confusing exercise. Both for fleet managers, and the insurance companies arranging the policies.

Fleet insurance is a policy that covers any number of vehicles in a fleet. The policy is often in the name of the company or the owner of the business. The details of the policy will be specific to the insurance needs of the company.

What are the benefits of taking out fleet insurance?

If you’re weighing up if fleet insurance makes sense for your business, the main benefits or advantages for most companies include:

Less paperwork – physical paperwork, digital documents, whichever you choose, there is less work involved when taking out one policy over multiple policies.

Cost savings – fleet insurance typically works out to be a lot less expensive. This is usually reason enough for most companies to pursue a fleet cover.

Greater transparency – with fleet insurance, it’s a lot easier to understand the terms of the policy over juggling multiple policies. This means less risk of someone breaching a policy rule.

What are the drawbacks of taking out fleet insurance?

The main drawback is having all employees and vehicles under the umbrella of one policy. One accident-prone driver can cause a rise in the premium for everyone.

If you have a particularly high-risk employee or vehicle, it’s often worthwhile taking out a separate policy to mitigate that risk.

Types of cover

With fleet insurance, your two main types of cover are the same as with domestic car insurance;

Third-party insurance – this is the minimum level of cover most insurers will accept. Third-party cover protects other road users if the accident was the fault of one of your drivers. There is some obvious risk with this type of cover, especially with larger fleets. The first party, which is the company taking out the insurance, is responsible for their own damages and losses.

Fully comprehensive – as the name suggests, fully comprehensive cover offers full protection regardless of who is at fault in the case of an accident.

Does fleet insurance cover all types of Vehicles?

Yes, this is one of the main benefits of taking out fleet insurance. You’ll need to discuss what types of vehicles you have with insurance companies you’re interested in taking out a policy with. Typically, you’ll be able to incorporate all types of vehicles, as well as plant and equipment.

How many vehicles do you need to qualify for fleet insurance?

In most cases, you should qualify for fleet insurance with any number of vehicles greater than one. If you’re intending to expand your fleet within a calendar year, you should consider this form of insurance.

Can telematics reduce fleet premiums?

There are studies that show companies can reduce their fleet premiums by as much as 60% in some instances if they’re using telematics to monitor their fleet.

Telematics are small devices, which we explain in more detail in this post, that gather data on how a vehicle is being driven.

Fleets of vehicles with telematics devices installed are able to reduce accidents, improve efficiency, and identify vehicle and driver risks. All of which have an impact on insurance claims premiums.