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Unlike individual car insurance, a fleet insurance quote spans across multiple vehicles and covers significantly more variables.
We discussed all possible ways to save on fleet insurance with an experienced fleet insurance expert, and came up with a list of 33 ideas that will help you to save on fleet insurance.
Do you have any other ideas or thoughts you want to share? Please, do so in the comment at the end of the article.
First, let’s understand what is a fleet from the insurance perspective. Financial Services Commission of Ontario (FSCO) defines a fleet as “…groups of at least five vehicles that are under common ownership or management and that are used for business, commercial or public purposes.” Fleet insurance includes several components – you can find out more about it here. Now when we are clear of definitions, let’s dive into savings opportunities.
- Driver’s history: Make sure that you hire drivers who do not have a bad driving history. It is important that you know about your drivers, if they have been involved in accidents in the past or had any convictions.
- Young drivers: Consider age when selecting your drivers. Young drivers mean less experience and more risk, which is typically reflected in your fleet insurance rates.
- Regular, ongoing perspective on your driving staff: You want to know if any of your drivers have any problems with the law.
- Preventive measures for drivers: Make sure that you or your fleet managers regularly invest time to go through topics with your drivers, such as safety, risk reduction, guidance, etc. Conducting a regular safety huddle with your drivers can demonstrate to insurers that you take the health and safety of your team very seriously.
- Train your drivers: It is important to keep your driving staff in top professional shape. Make sure that, if necessary, drivers go through a series of training or side-by-side coaching/mentoring.
- Ensure a safe environment for your drivers: Remember that health has the highest value. Make sure that your vehicles are equipped with airbags, padded dashboards and laminated glass. Insurers pay attention to these details.
- Use dashcams: A dashcam in your fleet vehicle is a simple and inexpensive way to conduct driving monitoring and better understand critical issues on the road.
- Leverage fleet management solutions: These are comprehensive solutions that can help you stay informed regarding the vehicle’s location, its driving routes, and many other aspects. Insurers like seeing professionally managed fleets.
- Fleet maintenance procedures: If you can demonstrate to your insurer that you have a proper fleet management program in place, such as monitoring of vehicle conditions, making sure that all the vehicles are safe to drive etc., an insurer will likely reward you with better insurance rates.
- Avoid overtired driving staff: Enforce rules and use monitoring so that your fleet drivers do not drive for excessive hours. Make sure they get enough rest.
- Know your own claims history: Claims history is one of the key aspects influencing your fleet insurance rates.
- Pay as-you-drive fleet management solutions: These are solutions that help you to manage your fleet and report driving patterns to an insurer (e.g. My FleetSolution from Intact and Telus). Should your fleet’s driving patterns appear not overly risky, you might be rewarded with lower rates.
- Know how driving patterns may impact your rates: If you have fleet management solutions in place that track the driving behaviours of your vehicles, make sure your drivers pay attention to driving at an accelerated rate, aggressive breaking, speeding, sharp cornering, etc. Some insurers might take into account time of the day when your drivers are active on the road.
- Pay attention to your insurance policy: An insurance policy is a complex document. Even a personal car insurance policy requires a lot of time to be reviewed in detail. For your fleet insurance policy, you need to invest even more time understanding its details and any extra riders that have been added to the policy by default, and that you might not need, such as a bobtail insurance rider (fleet insurance coverage that covers your vehicle when your drivers take it home or leave a commercial vehicle at their personal residence).
- Scrutinize all claims paperwork: Nobody is 100% protected from accidents – they just happen. If you had to go through a claims process related to one of your vehicles, make sure you reviewed all the relevant materials, including repair work completed on the vehicle to make sure that everything is ok. Remember that an incorrect claim amount can significantly inflate your future insurance costs.
- Compare insurance quotes: Comparing fleet insurance quotes is very important even for very standardized individual car insurance. Auto insurance quotes for the same car can differ by 200% or more. In the case of fleet insurance, variations are even higher in terms of fleet insurance quotes, the type and amount of coverage, insurers’ experience in your particular industry, additional devices (such as fleet management systems) and more.
- Go through a broker: Going directly to an insurance company that sells fleet insurance seems like a simple solution, but you are limiting yourself and your options. An insurance broker often work with dozens of insurance companies and often has decades of experience in your industry. The best thing is, it does not cost you a cent! Brokers are compensated through insurance companies whose fleet insurance they sell.
- Right-size your fleet: Every extra vehicle costs you extra in fleet insurance costs. If you rely on solid planning and scheduling of your existing fleet, this can improve its efficiency and move more goods with less vehicles. Remember that you often need to have a solid business case for increasing the size of your fleet. This means that your insurance costs will go up as well.
- Your vehicles matter: Similarly, to individual car insurance, all fleet management vehicles (make, year, etc.) have a history (theft, accident rate etc.) and thus, some fleet vehicles are more expensive to insure than others. Especially among trucks, one can find a variety of types: long-haul trucks, dump trucks, flatbed ad box trucks, local delivery trucks, trailers and many more. Truck insurance quotes vary a lot depending on the type of truck and nature of goods transported.
- Location: The location of your company matters for your fleet insurance. An insurer will be interested on where the headquarters of your fleet is, and where your drivers are driving.
- Geography: Driving within Canada vs. driving outside of the country, such as to the U.S., automatically means a difference in fleet insurance costs. Make sure that you do not forget to inform your insurer if you suddenly have new routes that take your fleet vehicles outside of the country.
- Size of the coverage: Make sure that you have a proper amount of coverage on your all your fleet vehicles. Some of the coverage is mandatory (3rd party liability, accident, etc.) but others are optional (collision coverage, comprehensive coverage). You might decide not to take collision coverage if one of your fleet vehicles has already served its life and is ready to be written off and salvaged at the first opportunity.
- Special coverage: Carefully consider if all your trucks need a special type of coverage, such as truck cargo coverage, reefer insurance coverage, or bobtail insurance. Over time, the scope of your business may change, along with the nature of goods transported. If you, in the past, only used your trucks to transport valuable cargo, but now you transport a greater variety of goods, you may want to designate a few trucks to non-valuable cargo. You can adjust the insurance on these trucks accordingly.
- Avoid transporting dangerous goods if you do not have to: Insurers know that if you transport hazardous or dangerous materials, it may result in a very costly claim that includes an expensive clean up. Carefully consider what type of goods your trucks transport.
- Distance travelled: The less distance your fleet has to travel, the lower your rates typically will be (though many other things will impact insurance quotes as well).
- Seasonal fleet management: Make sure that your fleet is in a good shape once the seasons are changing. All your vehicles should have winter tires, tire pressure should correspond to the current season, wipers should be in good shape, the windshield fluid and battery ready for winter conditions, etc.
- Avoid insurance scams: Make sure that your drives are aware of typical insurance scams such as “swoop and squat”, “false signals” or “fake stops” – these have the potential to result in an expensive insurance claim which might inflate your fleet insurance rates. Here are some scenarios for staged collisions, as noted by the Canadian Insurance Brokers Association.
- Storage location: The place where you park/store your vehicles matter to insurers. A simple, unsupervised outdoor parking area creates higher insurance rates than parking in a garage that is monitored 24/7.
- Do not underestimate theft: Both your vehicle or its cargo can be stolen when your driver is not in the vehicle. Equipping your vehicle with an anti-theft device that is recognized by an insurer will likely result in lower fleet insurance premiums. According data from Cargo Net cargo thefts reached $18 Million in U.S. in the last quarter of 2014 and there were at least 10 reports of cargo theft in North America that exceeded $1M each.
- Search for discounts: Some insurers offer discounts for different things – from loyalty rewards to driver’s age and qualifications. Some insurers can reward your claim-free driving history with extra discounts.
- Assess deductibles: Spend a bit of time learning how changes in deductibles will impact your business. Does your company have enough free cash flow / funds to cover a large deductible?
- Bundles can be cheaper: If, in addition to your fleet insurance, you need other types of commercial insurance, e.g. commercial property insurance, a bundle can result in lower costs than if you buy it from different providers as stand-alone insurance policies.
- Type of business matters: It matters to insurance providers what kind of business you are in. Transporting packaging materials (empty boxes, wrapping materials etc.) means lower premiums than transporting gravel with dump trucks. A local delivery business with local delivery trucks has different premiums than long distance transportation relying on long-haul trucks.
We hope that you find these tips very useful. Please feel free to let us know if something else is missing from this exhaustive list. We suggest you keep in mind tip # 17 – consider getting a fleet insurance quote through an experienced commercial insurance broker. They have a very good perspective on how you can get the fleet insurance policy with coverage you need.