Commercial Fleet Insurance: Coverage and Savings

fleet insurance

Most businesses with only a few company-owned vehicles will be sufficiently covered by a commercial auto policy.  However, when the number of vehicles exceeds 6 (depending on your state), a fleet insurance policy is the way to go.  A fleet policy is a packaged policy covering all of the vehicles used by your company and the drivers who operate them.  In general, a fleet policy will have these features:

  • The option to choose liability or comprehensive coverage, where the comprehensive option can vary with each vehicle.
  • A single, set liability limit for each vehicle. For example, every vehicle can be covered for $100,000 in damages caused per accident.
  • It will cover all bodily injury and vehicle damages, but will not cover anything that is not a part of the vehicle itself. Damaged or lost cargo must be covered by a separate inland marine policy.
  • It cannot cover construction equipment. Even if the vehicle is on wheels, this must be covered using an equipment schedule on a packaged business owner’s policy.
  • Coverage includes all of the drivers and vehicles specifically listed on the policy. Drivers do not need to be listed on each vehicle; any driver on the policy can drive any vehicle on the policy and be completely covered.
  • If vehicles are not owned by a company (lease or title held by lender) then comprehensive will be required
  • Your policy may or may not automatically include roadside assistance and rental coverage. If these are not part of your policy, then you may want to add them as a safeguard so that an accident does not adversely affect your company’s ability to continue with business as usual.

Here are a few good practices for reducing your fleet insurance cost:

  • When not in use, store all vehicles in a protected lot. Secure garages or parking lots can save money on premiums and alleviate your risk of theft.
  • Mandate that all drivers take driver education courses. Submit proof of yearly course completion by all listed drivers with your policy renewal each year and the cost of insuring your fleet should be reduced significantly.
  • Avoid very young and elderly drivers. Listing drivers in these higher-risk groups can increase the cost of your insurance policy.
  • Make sure all drivers have and maintain clean records and do not allow their drivers licenses expire or lapse. While this may not change the cost of insurance, it can cause a gap in your coverage which could lead to a declined claim.
  • Install anti-theft alarms on all vehicles. This can also be a source of a big discount on your policy. Just be sure to keep records of the installations or factory specifications for the vehicles.
  • Keep copies of all DOT commercial vehicle licenses, vehicle registrations, drivers’ licenses, and proof of insurance on file and in each vehicle at all times. This is a good bookkeeping practice and will not change your insurance cost, but will make any insurance filing much easier.
  • Keep driver log-books and repair invoices on file to make any claim processing easier and allow the claims to be paid as quickly as possible. Check out our Insurance Claims article for more information on the best ways to get your losses paid quickly and completely.
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