How to save money on your fleet insurance

June 19, 2022

If you are running more than a couple of vehicles for use by your business, you almost certainly know about the benefits of fleet insurance. By keeping all your cars and vans under a single umbrella policy, you comply with the legal requirements for motor insurance and have a single annual renewal date that keeps every vehicle within the law.

Fleet insurance is also typically cheaper than on a vehicle-by-vehicle basis. But did you know there are still potentially further ways to save money on that fleet insurance?

Insurance – what’s it all about?

The Association of British Insurers (ABI) sums up the whole purpose of insurance to manage risk. When you arrange insurance, you are buying protection against unexpected financial losses – through events such as damage, loss, or theft.

The legal requirement for a minimum of third-party motor insurance for any vehicle your company puts on the road is to ensure that you can indemnify other road users for damage, injury, or other losses you cause.

But the cost of your fleet insurance is also determined by how much you manage your risks – and the following are some of the ways in which better management of the risks may lead to cheaper insurance premiums:

The drivers

• many of your motor insurance risks relate to the drivers of the vehicles covered by your fleet insurance;

• naturally, you must ensure that any driver holds the appropriate licence for those vehicles you allow him or her to drive;

• the better and more rigorous the training you give to your drivers, the fewer road traffic accidents they are likely to have – and the reduced price of your fleet insurance premiums may reflect those steps you have taken to manage the risks;

• trained drivers may continue to be monitored by devices such as dash cams – which provide real-time recordings of what’s actually happening on the road and will help establish liability in the case of an accident;

• you might want to introduce driver policies that reward those that avoid accidents and penalise those who are more accident-prone – incentives such as this might result in lower fleet insurance premiums;

Driver restrictions

• fleet insurance providers have a preference for more mature – and, therefore, more experienced – drivers. So you might restrict the “any age” driver defined in your fleet insurance policy documents to drivers above a certain age (typical cut-off points are ages 21, 25, and 30 years of age. But you might consider an even higher age-bar);

• you might refine these age restrictions or reserve for specially qualified drivers access to any high-performance or high-value vehicles used in your business;

Excess

• just as with any other type of general insurance, your fleet insurance cover is almost certain to carry an excess – the first part of any successful claim for which you remain financially responsible;

• by increasing the amount of voluntary excess you are prepared to pay, you are sharing a more significant part of the risks with your insurer. So, lower premiums are likely to be charged. Remember, though, that any claim you subsequently make will cost you more.

Fleet insurance makes sense if you operate more than a couple of vehicles in your business for cost and admin purposes. It can make even greater sense when you can save still further money on the cost of that insurance. Further reading: Fleet insurance FAQs