With careful management and attention to detail, fleet insurance can reduce insurance costs, enhance the safety of employees and benefit fleet operators with as much coverage as required.
It can also make a significant contribution towards road safety.
Fleet insurance covers a group of cars, commercial vehicles and trucks under one policy.
It is designed to distribute the risk across the board, so that a fleet operator pays only once for each peril, rather than insuring each vehicle individually, thereby paying for each vehicle’s risk.
It also assesses the risk and evaluates the premiums based on the challenges for the entire fleet.
“Fleet operators have unique needs,” explains Murray Price, managing director of Eqstra Fleet Management.
“The insurance must take into account the complexities of insuring business vehicles, such as insuring for multiple drivers and making sure vehicles can be used for as many applications as necessary.
It is important to consult with the right insurer to ensure the business gets the optimum level of vehicle cover.
“The insurer must understand the operational demands of the fleet, particularly if it is operating a number of heavy-duty trucks and commercial vehicles,” he adds.
While every fleet operator will have unique needs, there are some basic factors that every company will take into consideration when calculating fleet insurance costs.
- The number of vehicles – and their type – to be insured
- Vehicle age and condition
- Estimated kilometres
- Claims history
- Vehicle telematics solutions
- Driver behaviour history
- Book value of each vehicle covered
- Routes travelled, e.g. urban versus rural
To qualify for fleet insurance, the vehicles must be owned by the same business/person.
The insurer usually requires a minimum number of vehicles in order for the insured to qualify for fleet insurance.
It remains the duty of the fleet owner to keep the insurance company informed of any changes to the fleet.
- Fleet insurance covers all vehicles owned by the business and ensures each vehicle is outlined in the policy. This greatly simplifies claims administration.
- Drivers who struggle with individual insurance will be covered under a fleet insurance policy. This will assist them should they wish to obtain individual insurance at a later time.
- Costs: While companies who provide fleet insurance must take into account the driver’s past history and experience, fleet insurance costs are much less than purchasing individual insurance.
What to look for
Fleet insurance premiums should be based specifically on the risk profile of the business. It is essential to investigate the following when choosing a fleet insurance company:
- The ability of the insurer to administer the claims processes effectively and quickly
- Availability of emergency roadside assistance
- Cover for reasonable storage costs or towing to the nearest repairer
- Approved repairers that the insurer deals with
- Cover for the costs incurred for the removal of the wreckage as well as costs for replacing locks, keys, remote controls or the reprogramming of vehicle security systems
- Cover if needed outside the borders of South Africa
- Cover not only for the vehicles but also for accessories and spare parts
- Legal liability insurance cover for damage to property of other parties as a result of a vehicle accident.
“As fleet managers and logistic companies seek affordable commercial vehicle fleet insurance, road safety is the ultimate beneficiary,” continues Price.
“Affordable fleet insurance depends on safer driving behaviour and the ability to accurately measure such driving. Fleet insurance rewards safer driving, which in turn assists in reducing accidents and improving road safety.”