Businesses use vehicles for many purposes. Some are used for making deliveries. Others are used by salespeople to travel about while calling on clients. Frequently, executives are furnished with a personal company car as a part of their compensation package with their employer. Regardless of how the automobile or other vehicle is utilized, when enough of them are operated by the same company at the same time, it is considered a commercial fleet.
Insuring a fleet of cars is different from buying a policy for a single vehicle or several vehicles.
Because company cars are not always driven by the same person, the policy has to be designed to cover the companies assets for multiple drivers. It is not always possible for a company to predict which employee might drive which vehicle. This means that a list of potential drivers for the company may have to be evaluated and applied to each automobile that is owned.
A company may have to pay higher rates if some drivers do not have a completely clean driving record.
It is for this reason that companies will regularly require their drivers to have clean driving records as a condition for employment. Just a few small infractions by some drivers can cause the rates that cover the entire fleet to increase. When the larger price tag is extended over many cars in a fleet, the change in cost can be substantial if the company has 15 or 20 cars on the road.
Fleet insurance will take into consideration the size of the fleet and the type of cars that are included.
Most companies do not buy too many high-end, luxury cars for inclusion in the commercial fleet. On the other hand, they do not always shop for bargain basement, compact cars either. The value of the fleet will affect the cost of the insurance. Larger and more expensive cars will raise the cost of the insurance. By staying with the cars that are comfortable and practical, commercial fleet car insurance rates can be kept in check.
Commercial fleet car insurers rate the fleet policy based on the use of the cars.
Cars that are frequently going to be in heavy traffic or high crime areas will cost more to insure than those that will be driven primarily on short highway trips. Generally, the cost of fleet insurance becomes an average based on the overall use of the fleet. However, adjusting the coverage for certain vehicles can help offset the higher risk factors. A wise fleet manager will negotiate with the insurer to manipulate the coverage applied from vehicle to vehicle to get the best mix of protection and cost.
Fleets are also rated based on the number of miles that each car will be driven.
As before, the mileage can be an average of all of the cars in service for a given company. If a few cars are heavily used and others receive rather light duty, this may be used to factor a better overall rate for the fleet than just using an average of the miles that are driven.
Like personal vehicle coverage, a fleet does not always have to be full coverage.
If many of the vehicles in the commercial fleet are not leased or do not have liens, a company may be able to drop some of the collision coverage. Given that most drivers will not have accidents, it may be cheaper to repair a car or two per year than to carry full coverage insurance on the entire fleet. Even if this means having to pay to replace the entire car, this can be a way to save when a fleet has grown quite large.
Just as with other commercial vehicle policies, a fleet policy must include enough liability to protect the company.
Lawyers and individuals can begin to see dollar signs when a vehicle accident with personal injury is the fault of a commercial vehicle. These types of lawsuits can result in very large judgments. Because of this, it is imperative that a commercial fleet car insurance policy has big liability limits to keep the company out of bankruptcy in the event of such a lawsuit being won against them.