Fleet Insurance

How Much Fleet Insurance Do I Need?

Which Level of Cover?

Decide the level of cover that suits your business:

• Comprehensive
• Third party fire and theft
• Third party only

As for ordinary motor insurance, you cannot take a fleet on the road without one of these three basic motor vehicle insurance policies.

Most business and commercial policies are either comprehensive - covering damage to your vehicle - or third party to cover your legal liability for injury to others and/or damage to property caused by your vehicles.

You can 'pick and mix' the type of cover, depending on the age/value of individual vehicles in the fleet, ie, insure some under Comprehensive and others under Third party fire and theft or Third party only.

The cost of the fleet insurance policy will depends on the business you are in, its size, the type and value of vehicles, number of drivers and your claims history, usually over the last 3 - 5 years.

The fewer the claims you make then the lower the premium.

Risk factors

Risk factors are taken into consideration when calculating the cost of quotes for fleet insurance cover. These include:

• Engine size and total weight of loaded vehicles. Unless previously agreed, containers or trailers attached to the vehicle could void your policy.
• Age and number of drivers and whether or not the drivers are named on the policy. 'Any driver' increases the risk. Another question insurers will ask is whether drivers have previous motoring/other criminal convictions. If the answer is yes, the cost to insure them will be higher, while some insurers will refuse to cover them at all. Drivers under 25 will incur a higher excess.
• If you carry goods, then the type of goods can have a major impact on cost e.g. perishable foodstuffs, bottled gas, flammable solvents.
• Ownership of goods in transit i.e. do the goods belong to the fleet owner or are you a courier of other people's goods? (If it is the latter - you need courier insurance, also known as Hire and Reward or Haulage cover.)
• Alterations/additions to vehicles such as alloy wheels, lifting ramps, winches or hoists.
• Whether the vehicles are right hand drive or imported to the UK.
• Poor claims history
• Your attitude to risk and risk management

The good news is that there is a lot you can do to make sure your premium is reduced.

How to get cheaper fleet insurance quotes

• Go for smaller vehicles - the smallest weight and engine size possible for your purposes. Larger engine capacity is viewed as a hazard.
• Take out membership of a relevant association - eg, ACFO, Freight Transport Association, Road Haulage Association.
• Keep vehicles well maintained and drivers fully trained
• Produce and promote informative literature - a fleet policy/maintenance guide/drivers' guide clearly stating responsibilities, driving rules and regulations.
• Nowadays most new vehicles have anti-theft devices such as immobilisers and alarms as standard. Aftermarket 'Thatcham' approved systems are more likely to earn additional discounts.
• Keep vehicles in a secure locked garage or off the road.
• The older the driver, the more experienced, therefore the lower the premium - drivers over 25 and under 65/70 are cheaper to insure.
• Increase the voluntary excess payable, ie, the amount of money you agree to pay out in the event of a claim. The higher the excess, the cheaper the premium.
• Do not store tools/equipment/goods in vehicles.
• Declare no claims bonus and if you can, transfer drivers' no claims bonus to vehicles
• Keep your drivers. A high turnover of drivers does not instill confidence in an insurer, and there can be more insurance admin costs
• Limit what you use vehicles for, eg, no hazardous or toxic materials
• An 'any driver' policy costs more, so limit the number of drivers to save money
• Put signage on your fleet to reduce the risk of theft
• Locate your business outside of urban and high crime areas.
• Don't allow ignition keys to be left in vehicles
• Poor driver history? Previous convictions will increase premiums
• You'll earn discounts for low mileage
• Buy online - you can save up to 10% on the premium
• Comply with strict Health & Safety guidelines, particularly so if you are involved in ferrying hazardous goods on the public highway
• Be clear about fees - how much commission are you paying for the service?

Fleet management

The better managed a fleet, the fewer accidents and claims costs. If claims increase, premiums increase. Good fleet management will help cut the number and cost of claims.

Large operators employ their own managers to do the job, while small to medium-sized outfits can hire the services of a fleet management company - ask your insurer to recommend one.

Safety first

Any vehicle that's used by a business, regardless of whether it is owned by the company or an individual, is considered a place of work. You must therefore comply with current legislation including:

• Health and Safety at Work Act 1974
• Road Traffic Acts
• Working Tine Regulations 1998
• Management of Health and Safety at Work Regulations 1999
• The Human Rights Act

You must have proper working practices in place, with regular risk assessments of drivers, vehicles and operating procedures, and keep a written record.