According to the National Institute for Occupational Health and Safety (NIOHS), work-related crashes cost U.S. employers $39 billion in 2019 alone. This stresses the importance of adequate coverage for commercial fleets to help offset these workplace accident expenses. Fleet vehicle insurance is a crucial expense for any company that operates several vehicles as part of their business. It provides comprehensive coverage for multiple vehicles, such as delivery trucks, service vehicles, passenger vehicles used by employees, and other commercial vehicles, on one insurance policy.
What Does Fleet Vehicle Policies Cover?
The core requirements of liability coverage are for bodily injury, property damage, and minimum state limits. However, additional protection tailored to your specific fleet needs is also worth exploring. Roadside assistance, for example, can help minimize downtime and lost productivity from small breakdowns. Physical damage coverage insulates against risks outside of driver control, like weather or theft.
Collision and uninsured motorist coverage are especially prudent for larger fleets with higher exposure, protecting your investment. You may also want to consider higher-than-minimum liability limits to fully shield your business from injury claims. Some fleet insurance policies provide broad coverage for employees driving fleet vehicles.
Others may require a specific list of authorized drivers to be designated for each vehicle or vehicle type. Fleet managers must closely monitor employee records especially if a fleet insurance plan operates on an approved driver list model. This type of due diligence ensures claims are smoothly handled if an incident occurs, thus mitigating processing delays or issues involving unlisted operators.
Types of Fleet Vehicle Insurance Coverage
Most fleet insurance policies require basic liability coverage but offer additional protection through optional coverage types. The three main coverage categories include:
- Liability Insurance: This policy covers costs associated with legal responsibilities if a fleet vehicle is involved in an accident. It includes property damage to other vehicles or objects and bodily injury claims from other parties. State laws mandate minimum liability limits be met.
- Collision Coverage: This plan pays for repairs when a covered fleet vehicle collides with another object. It provides financial protection if one of the organization's vehicles is damaged in an accident, regardless of who is at fault.
- Comprehensive Coverage: This fleet vehicle insurance protects the fleet from financial losses due to incidents other than collisions, such as weather events, fires, or acts of vandalism. It also includes coverage for uninsured motorists if an at-fault driver cannot provide insurance information following an accident.
Factors That Influence Premium Costs
Several characteristics of the fleet and its usage influence the rates charged for vehicle insurance policies:
- Vehicle Type/Size: Larger commercial vehicles, specifically those designed to transport goods/passengers, and specialty vehicles tend to be more expensive to insure.
- Vehicle Age: Newer vehicles have higher replacement costs, so premiums are substantial compared to older fleet vehicles.
- Driver Factors: Carriers analyze factors like drivers' ages, years of experience, driving records, and any motor vehicle violations.
- Mileage: Higher annual mileage exposes the fleet to greater risk, resulting in higher premium costs (odometer readings can be tracked).
- Garaging Location: Urban areas with congested roads and higher accident rates mean larger insurance bills.
Proper fleet management practices like driver safety training and telematics monitoring can help provide discounts by reducing risks.
Tips for Choosing the Right Policy
When shopping for fleet vehicle insurance, companies must first obtain itemized quotes from several carriers outlining coverage types, limits, and total costs. Next, fleet managers should compare the scope of protection against price points to identify an optimal balance of risk transfer and affordability. Consulting with an experienced commercial insurance broker is also highly recommended, as they can provide expertise in addressing all coverage needs.
Wilmar Inc. helps fleet businesses evaluate renewal terms in advance and recommends practical risk management strategies to mitigate exposures over the long run. Contact us today to learn how a customized policy program can protect your assets while controlling insurance expenditures.
