Carl Schlegel, Sales Manager - October 15, 2019
If you have a vehicle you should be familiar with personal auto insurance and how important it is. It's your first line of defense, protecting you and your vehicle from the unforeseen on the road! But what happens when you're a business owner and you have multiple vehicles in your fleet helping to drive your business forward (sometimes literally) every day. A personal plan just won't cut it! Enter fleet insurance.
Fleet insurance provides liability coverage for all of your company's vehicles under one policy. But is fleet insurance really necessary? What's the difference between personal and fleet insurance? How expensive is a fleet policy compared with personal policy? And how can fleet insurance benefit your company? In this article, we will be answering those questions, showing you how fleet insurance can protect your drivers and your business.
Let’s start by reviewing the main differences between personal and fleet auto insurance:
The Insurance Holder
The first difference between personal and fleet auto insurance is relatively obvious, with fleet insurance there is no individual holder for each vehicle but instead, a company or corporation acts as the insurance holder for the entire fleet. In practice, this allows you to group any number of vehicles into a single insurance policy, which greatly simplifies any aspect of your business that interacts with the fleet, such as accounting, finance, and operations. Having multiple vehicles under the same fleet insurance policy could also let you negotiate an insurance discount, further saving your company valuable resources.
From a legal perspective, most state laws require special treatment for commercial vehicles, especially when those vehicles are involved in high-risk duties, like oversized trucks used in construction sites, high-capacity buses, chemical product transports, and so on. And because most of these vehicles also require a special license to be operated, a higher degree of insurance is often also required, a coverable option under most fleet insurance plans. And, at times, GAP and Umbrella insurance policies are an additional requirement or strongly recommended to protect your drivers, your business, and your fleet.
Overall Cost Of Insurance Plans
Is fleet insurance exponentially more expensive than personal auto insurance? This one of the questions that worry business owners the most. Truthfully, the answer depends on how you look at it. Fleet insurance costs are initially higher per vehicle, that’s unquestionable. However, in the long run, fleet insurance could potentially save you a lot of money in comparison with its personal insurance counterparts. There are also a greater number of discounts available under fleet insurance policies compared to personal insurance policies. Many insurance companies offer fleet insurance plans that integrate additional safety features - like GPS tracking and monitoring - designed to decrease the number of injuries from accidents and to reduce the costs associated with accidents and vehicle insurance plans. But which policy is right for you? Great question! Your leasing specialist at Carlease can help recommend a great program designed to cover all aspects of your business.
Fleet vs Personal Insurance Coverage
In general terms, both personal and fleet auto insurance policies safeguard you against the most common threats and risks, provide you with invaluable financial support to recover from unexpected situations. But when you get into the nitty-gritty regarding insurance policy coverage, the details are everything, and here are some key ones:
- Personal auto insurance will not cover repair damage, injuries, or legal fees incurred while conducting business activity (deliveries, visiting clients, transporting goods). Fleet insurance is specifically designed for this kind of commercial activity.
- Fleet insurance is a product designed to be completely customizable by business type, fleet size, and company requirements. This can be a double-edged sword as you'll need to pay special attention to what you need covered under the policy, thankfully, your Carlease specialist can help.
- Generally, there are different tiers of insurance. Make sure to be clear and read the fine print. Basic fleet auto insurance my only cover third-party participants of a collision - this means that basic fleet insurance may not necessarily cover items inside the vehicle nor vehicle damage, legal or medical fees for your employees. Because of its customizable nature, it’s highly advisable to ask your broker about the collision, comprehensive, and extended liability coverage of the fleet insurance in order to add them if needed. Read more about GAP and Umbrella insurance policies here.
- Depending on your industry, fleet insurance can offer you additional coverage for damages common in your line of business - always ask!
How can businesses lower their insurance costs?
When customizing your fleet insurance policy and coverage plan, there are ways to lower its cost. Insurance companies are experts in risk assessment, and any steps towards reducing the risk to your business will lower your insurance cost. The following list shows you some examples of how you can easily lower your fleet insurance costs through protective measures:
- Invest in security devices. Installing in your vehicles anti-theft systems, GPS tracking devices, dashboard cameras, or any other security-oriented device will certainly be welcome by insurance companies. This small investment can save your business BIG. Carlease works with companies to integrate these key safety features everyday
- Hire drivers with a clean record. Needless to say, the first thing insurance company will do is investigating your drivers’ past history. Insurance costs could go up or down - sometimes considerably - depending on the results. Hire drivers you trust to get the job done.
- Bundle insurance policies. Depending on the size of your fleet and the industry you work in, you may have the ability to bundle together the various insurance policies your business needs. Bulk discounts are a win-win situation for all parties involved. Here are some common coverage areas businesses (small and large) could/should consider: auto, liability, property & asset coverage, worker's compensation, and cyber.
Working with Carlease
Fleet insurance can definitely save your business money in the long-term and, in many cases, is a requirement. But what happens when you hire new drivers, acquire new vehicles (leased or purchased) or cycle vehicles and drivers out of active rotation? Suddenly, managing your fleet's insurance policy got a lot more complicated - but Carlease can help. With our comprehensive Fleet Management dashboard, tracking your vehicles has never been easier. View your assets, insurance plans, and drivers (in detail) on one easy-to-use site. Not sure where to start? Taking our comprehensive Fleet Assessment will help our leasing specialists provide you with the best solutions for your business.