What is Fleet Insurance?
16/02/2024
Fleet insurance is a type of commercial insurance that covers multiple vehicles owned and used by a business or organization. Rather than requiring separate insurance policies for each vehicle, fleet insurance allows companies to bundle all their vehicles onto one policy. This can make insuring a fleet of vehicles more efficient and cost-effective.
How Does Fleet Insurance Work?
Fleet insurance works by providing coverage for a group of vehicles instead of just one. Companies add all eligible vehicles they own, lease, or rent onto the single policy during underwriting. Most insurers require a minimum of 3-5 vehicles to qualify as a fleet for this type of insurance. However, some may offer fleet rates for as few as 2 vehicles.
Once issued, the bundled fleet policy covers liability, collision damage, medical payments, uninsured motorists, and other standard coverages for all enrolled vehicles. It may also include options like rental reimbursement and roadside assistance. Having one master policy significantly cuts down on administrative work compared to managing individual vehicle policies.
Benefits of Fleet Insurance Policies:
- Cost savings from multi-vehicle discounts
- Convenience of joint policy administration
- Flexibility to add/remove vehicles mid-policy
- Multiple drivers covered under one policy
- Specialized fleet loss prevention services
What Types of Vehicles Can Be On A Fleet Policy?
Fleet policies can cover a wide range of commercial vehicle types depending on the nature of the business and insurer guidelines. Typical examples include:
- Light-duty vans
- Heavy duty trucks
- Service utility vehicles
- Limousines and other passenger transport vehicles
- Police cars and other emergency response units
- School buses
- Construction and contracting equipment
Businesses like plumbing companies, delivery services, transportation providers, auto dealerships, and contractors commonly operate van, truck, and specialty vehicle fleets suitable for this class of insurance.
What Drivers And Businesses Are Eligible For Fleet Insurance?
Policies are issued in the name of the business entity owning the vehicle fleet. Thus any company can obtain coverage - examples range from small landscaping companies to major corporations and government agencies operating large numbers of cars, trucks and vans.
Unlike personal auto insurance, fleet policies do not specify individually named drivers. Instead, they define broader categories of employees authorized to operate fleet vehicles, often restricted by age and licensing requirements. However, some fleet insurers still require driver eligibility screening and motor vehicle record checks.
Why Do Companies Offer Fleet Insurance Discounts?
Insurers provide multi-vehicle fleet discounts because covering many vehicles on one streamlined policy saves administrative costs associated with underwriting, billing, and servicing individual policies. Multiple vehicle discounts for fleets may range from 10% to as much as 20%, contributing to significant overall savings especially for larger fleets.
The convenience, flexibility, and cost efficiency of fleet policies make them a valued insurance solution for any entity needing to insure a sizable collection of commercial vehicles. By understanding exactly how fleet coverage works, interested businesses can determine if switching from personal auto policies to a specialized fleet plan could be beneficial.
This article is designed to offer general advice and may not apply to every insurance, broker, insurer, cover or policy. You would need to check the individual policy benefits of each cover with your insurer or broker.
