How Much Fleet Insurance Do We Need?

18/06/2013 -- Mary Simpson
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Which Level of Cover?

Decide the level of cover that suits your business and budget.  As with ordinary motor insurance, you can’t put a fleet lorry, van or car on the road without one of these three motor vehicle insurance policies:

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

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

The cost of your fleet insurance policy will depend on the nature and size of the business, type and value of vehicles, number of drivers and your claims history over the last 3 - 5 years.

The fewer the claims then the lower the premium.

Risk factors

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

  • Engine size and total weight of loaded vehicles. Containers or trailers attached to the vehicle could void your policy.
  • Age and number of drivers and whether drivers are named on the policy. 'Any driver' increases the risk. Drivers with previous convictions are dearer to insure - some insurers won’t cover them. Drivers under 25 incur a higher excess.
  • If you carry goods, the type of goods can hike up cost, e.g., flammable solvents.
  • Ownership of goods in transit, i.e., do goods belong to the fleet owner or do you courier other people's goods? If it’s the latter, you need courier insurance, also known as Hire and Reward or Haulage cover.
  • Alterations/additions to vehicles - alloy wheels, lifting ramps, winches or hoists.
  • Whether the vehicles are right-hand drive or imported to the UK.

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 - e.g., 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.
  • Aftermarket 'Thatcham' approved systems can earn additional discounts.
  • Keep vehicles in a secure locked garage or off the road.
  • Drivers over 25 and under 65/70 are cheaper to insure.
  • Increase the voluntary excess, i.e., the amount 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 doesn’t instil confidence and can increase 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.
  • Buy online - you can save up to 10% on the premium.
  • 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's owned by the company or an individual, is considered a place of work. You must comply with current legislation:

  • 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.