How Does Fleet Insurance Work?

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While you may assume that fleet insurance is considerably more complicated than other forms of vehicle insurance, it often isn’t the case. Fleet insurance can be a convenient and cost-effective option for anybody looking to insure multiple vehicles for their business, keeping your coverage under one policy and simplifying claims and renewal processes.

Fleet insurance works by covering the vehicles on the policy at the same level – although insurers can make exemptions for specific vehicles if you require. Like regular vehicle insurance, it comes in 3 levels – third party only (TPO), third party, fire & theft (TPFT), and comprehensive. TPO, the lowest level, will only cover damages to third parties while driving, meaning if your vehicle is damaged in an accident, you’ll be required to cover the bill yourself.

TPFT offers the cover provided by TPO but will also protect you in the event your vehicle is stolen or damaged in a fire. It can be a great option in industries where there’s a higher risk of theft (such as courier services, where drivers might leave vehicles unattended with the keys in while they quickly deliver an item), but don’t be surprised if some insurers won’t offer it due to the additional risks.

Comprehensive, the highest level, offers all the protections of the previous two but will also protect your vehicle if it’s damaged, making sure the impact on your business is minimised. Contrary to what you might assume, comprehensive is often the cheapest coverage level (insurers prefer risk-averse buyers) and is well worth the investment if your business relies on its vehicles for income.

In terms of claims, compensation, and policy management/renewals, things mostly work the same for a fleet policy as they would for an individual vehicle. You’ll be required to give many of the details you’ll recognise from social, domestic & pleasure vehicle insurance, such as annual mileage, location, and where the vehicle is parked overnight.

One thing to always clarify is who exactly is covered to drive the vehicles. Most insurers offer any driver policies, meaning any employee of the business (even if they’re part-time or contracted) is insured while driving (assuming they’re doing so with the permission of the directors/management). Still, you can name each driver should you wish to. If you have mature drivers with good driving histories, this can lower your premium. However, if you choose to do this, keep in mind you’ll have to update it every single time a new employee requires access to a vehicle.

What is fleet insurance coverage?

Fleet insurance coverage is the term used to describe the vehicle protections offered by a fleet insurance policy. Fleet insurance is a form of commercial vehicle insurance designed to protect multiple vehicles owned by the same business. Having vehicle insurance before driving is a legal requirement in the UK, and a good fleet insurance policy can help make sure that none of the vehicles a business owns go out on the roads uninsured.

The exact coverage the policy offers will depend on the level chosen during the sign-up phase. Like social, domestic & pleasure (SD&P) coverage, it comes in three levels – third party only (TPO), third party, fire & theft (TPFT), and comprehensive. TPO coverage will only cover damages to other parties while on the road (so your vehicles won’t be protected). TPFT provides the same but with additional coverage for damage by theft or fire. This means if a buyer wants to protect their vehicle fleet, they’ll require comprehensive coverage.

Fleet insurance has become a highly popular option for business owners responsible for multiple vehicles, and it isn’t difficult to understand why. Keeping all your vehicles under one policy (from one provider) means there’s little room for confusion about what is/isn’t covered and simplifies the claims process if there is an incident as you’ll know exactly who to contact. A fleet policy also makes renewal and tracking premium payments easier. As fleet insurance policies can often include a large number of vehicles, insurers are also happy to offer discounts to attract your custom, helping reduce your per vehicle insurance spend.

How much is fleet insurance?

Every policy is different, but don’t be surprised if you’re able to achieve savings of 20%-30% on the total cost of insuring your companies vehicles by utilizing a fleet policy when compared with purchasing each policy individually.

This doesn’t mean you shouldn’t shop around – if you’re able to take advantage of some excellent individual vehicle insurance prices, they could easily compete with a fleet policy. However, this can be time-consuming and could create an administrative nightmare if you do need to make a claim – especially if your fleet is large (and growing).

The exact cost of your fleet insurance will naturally depend on the same factors as those the insurers would use to estimate the cost for an individual policy. More powerful vehicles, higher annual mileage, and higher risk business location (city centres, airports, etc.) will still increase the cost of your coverage, even on fleet insurance, so it’s worth comparing a few quotes for individual coverage versus fleet before making up your mind.

How to get fleet insurance

Finding fleet insurance shouldn’t be any more difficult than hunting for individual vehicle coverage. Comparison websites, brokers, and insurers will all be happy to have your business – which one is best for you will, naturally, depend on what your priority is when you’re signing up for your policy.

Shopping directly with an insurer can work if you already know who you want to provide your cover. Going direct can mean you might be able to take advantage of deals on their website or over the phone while you do so.

Brokers are insurance specialists whose job it is to head into the insurance market and find the best deal for you. They’re an excellent option for anyone who wants a more ‘human’ touch to their buying experience, offering the opportunity to ask any questions you might have and receive an expert’s opinion. While you might assume they’d be more expensive, they can often have a competitive edge by having access to prices and deals not available online.

Finally, comparison websites are an excellent option for anyone who wants to compare several options in as short a time as possible. If you have all the information about your fleet prepared, filling out the quote form shouldn’t take you more than 10-15 minutes, allowing you to gather as many prices as possible in a very short time frame. They can work with both direct insurers and brokers, providing a good cross-section of the market. Sites providing comparison search for fleet insurance include NimbleFins, QuoteZone, Confused and Towergate.

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