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Fleet Insurance – What is it Explained

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For those that operate a company and manage multiple business vehicles, fleet insurance can be used to insure those vehicles against theft, loss, or damages.

According to NimbleFins, fleet insurance offers a convenient and manageable way to cover many business cars, vans or trucks under one single policy. This is useful in the case of businesses that operate multiple vehicles. Insurance coverage may be obtained in the form of a fleet policy to protect without the need for keeping up with individual renewals and payments for each vehicle.

To be eligible for fleet insurance, vehicles must be registered in the UK and not owned under the name of the company or its directors. They also cannot be insured under a separate private motor vehicle policy. Companies that use vehicles for business purposes can benefit from having a fleet policy in place, as well as being a convenient way to shield from incidents, and it can guard against other things such as:

  • Vehicle loss or damage
  • Damage to windscreens and windows
  • Legal fee payment
  • Key loss
  • Breakdowns
  • Medical expenses associated with an accident

Fleet insurance policy coverage can vary depending on the insurer but can include protection for items like towed trailers or personal belongings.

How many cars do you need for fleet insurance?

A few years ago, the minimum number of vehicles required to be eligible for a fleet insurance policy was 5. Recently, limits have been lowered, and having just 2 business vehicles will qualify you for fleet insurance. At the other end of the scale, insurers will cover up to 500 vehicles under one single fleet insurance policy.

Commercial motor vehicle fleet policies are not just limited to cars; they can be used for several vehicle types that are used for business including:

  • Cars
  • Vans
  • Motorbikes (with some stipulations)
  • Trucks
  • Mini buses
  • HGV vehicles

Several factors will be taken into account when pricing your fleet insurance policy. The number of vehicles in your fleet and their age will determine the insurance amount. Also, the type of vehicles used in your business fleet will affect the premium price. Large trucks and lorries may be more valuable than small cars and therefore cost more to insure.

If your business has a prior history of accidents or claims, it will drive the price higher, so too will the amount of time that the vehicles are used. Occasional use for travel to a client will cost much less than vehicles driven daily for transportation purposes.

Driver history will also be considered. If drivers in your fleet have an unsafe driving record or points on their license, it will drive the cost of monthly insurance premiums higher due to the increased safety risks.

Who can drive on fleet insurance?

Fleet policies are designed to provide coverage for multiple vehicles that are to be operated by different people. Employees of the company are free to switch and change vehicles as needed while still being protected from accidents or damage under the fleet policy. This allows for flexibility of use and avoids needing to assign specific drivers to specific vehicles.

However, if the company knows exactly who will be using the vehicles, named drivers can be added to the policy, reducing premiums. Similarly, restricting the use of company vehicles to drivers or a certain age, for example, 25 or older, can also help bring down policy costs. Younger drivers are perceived to be at higher risk for things like accidents, so may require higher policy excesses.

Can anyone drive on fleet insurance?

For companies that want complete flexibility and wish to allow any person to drive their vehicles, fleet policies can be set up for any employee to operate the business’s car, truck, or other vehicles.

Even though an ‘Any Driver’ policy can allow anyone to drive, it does not mean that the vehicle may be used for any purpose as the insurance is provided as part of a commercial policy, which means that coverage will only apply when the vehicle is being used driven for business use.

Cars, trucks, van, etc., cannot be used to perform personal errands or trips, and an agreement will typically need to be signed stating as such. Drivers will also be required to keep a record of mileage and document the reasons for each trip. Any personal use will need to be incidental and kept to a minimum as it can void the policy.

An example of incidental personal use could be taking the vehicle home to manage an early trip to a customer site the following day. Driving for business purposes and stopping at a supermarket to pick up grocery shopping would not generally be counted as ‘incidental’ personal use.

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