What Is Fleet Insurance?

Fleet insurance provides cover across a fleet of business vehicles. It allows you to insure all vehicles under one policy rather than individually and you can either insure all drivers to all vehicles or assign named drivers. 

Read on to find out everything you need to know about fleet insurance.

Who can get fleet insurance?

Fleet insurance is available to businesses that lease or own at least two vehicles. The term ‘fleet’ refers to a group of between 2-500 vehicles on average but could be limitless in size depending on the insurer.

Moreover, any industry can get fleet insurance but depending on vehicle purpose you may be required to get a specific kind of insurance. For example, taxi companies will need to get either public hire or private hire ‘taxi fleet insurance’ depending on the nature of their business. 

Equally, any driver can be included as long as they are permitted by the company/directors. This is because the insurance policy is typically issued on an ‘Any Authorised Driver’ basis. However, you may find your premiums increase when covering young or previously convicted drivers.

How does fleet insurance work?

electric fleet

Fleet insurance covers numerous vehicles leased or owned by a business and can be registered in either the name of the company, a partner or a director. Payments can be made monthly or yearly depending on company need and deals can be found through insurance comparison websites or specialist brokers.

What’s included?

Just like standard car insurance, fleet insurance is available in three different levels of cover. These are:

  • Comprehensive – covers any damage to both your own and/or third party vehicles as well as any injuries to you, your passengers and third parties from a fault or non-fault accident.
  • Third party fire and theft – covers any damage to third party vehicles while also covering your own for fire and theft.
  • Third party only – covers only damage to third parties, including any damage to other people’s property/vehicles, plus any injuries to others and your passengers.

Policies vary from provider to provider on what they do and do not permit, so make sure to check your policy for any significant exclusions, such as personal use, before signing.

Should I choose an Any Driver or Named Driver policy?

When taking out fleet insurance, you can choose between either letting your drivers drive any one of your fleet vehicles or by naming drivers to each vehicle. This is known as an ‘Any Driver’ policy and ‘Named Driver’ policy respectively. Choosing between the two depends on your situation and preferences.

Generally speaking, ‘Any Driver’ policies have higher premiums but offer the most flexibility and can be better for larger companies that may otherwise struggle to track and enforce specific vehicle usage. However, having young or convicted drivers on an ‘Any Driver’ policy can substantially raise the premium costs as you’re spreading the driver’s risk across all vehicles.

As a result, some insurers allow you to have ‘Any Driver’ policies with named drivers. For example, this would allow you to insure the majority of drivers to all vehicles and only the higher risk drivers (young/convicted drivers) would be named to specific vehicles. This can help reduce premiums but still maintain the efficiency of an ‘Any Driver’ policy. 

For a small sized company though, it may make more sense to choose a ‘Named Driver’ policy and simply assign drivers to vehicles. This is usually also the most affordable option.

How much does fleet insurance cost?

While it can be difficult to determine the cost of fleet insurance, there are a number of influential points that you should be aware of, including both business specific and vehicle details.

 Business specific factors

Both the industry you operate in and the business procedures you have in place can have a significant impact on the cost of your fleet insurance.

For example, if you work in a higher risk industry such as courier or taxi services, then your premiums are likely to be higher. This is because the high mileage, frequent vehicle use and the need to arrive on time, all suggest riskier driving. 

Equally, if you don’t have a procedure in place to manage your fleet then that too can increase your premiums. Making numerous small claims and not properly vetting drivers demonstrates higher risk to insurers as it suggests that an accident is more likely to occur.

Vehicle details

fleet of cars

Just like with traditional car insurance policies, there are a number of general factors that will impact the cost of your overall fleet insurance. This is because the risk of each vehicle is assessed individually and combined to provide the overall risk. 

These issues include:

  • Vehicle age
  • Annual mileage
  • Driver age
  • Driver history
  • Location

As such, having a fleet of older vehicles is likely to cost more than a fleet of modern vehicles, for example, and so is having numerous younger drivers compared to numerous older drivers.

4 advantages of fleet insurance

If you have two or more company cars then fleet insurance can offer a handy way to manage your insurance. Here are four reasons why.

1. Less hassle

We all know that time is money and managing individual insurance policies for a large fleet of vehicles can take up a lot of time. However, fleet insurance covers your whole fleet of vehicles under one policy, meaning less paperwork and less hassle. This gives your team more time to focus on what’s important – your business.

2. Often cheaper

As well as being more convenient, fleet insurance is typically cheaper than having lots of individual policies. Depending on the size of your fleet, you could save a substantial amount on your insurance premiums. This is because the deal your fleet equates to is worth more to the insurer than an individual policy, granting you more negotiating power and allowing you to receive more competitive prices.

3. More flexible

Fleet insurance is also very flexible. You can choose which vehicles you insure within the fleet, which types of vehicles are included in the policy and whether or not each driver has access to all vehicles or just specific ones.

4. More inclusive

If for any reason you have a driver that can’t get insurance individually, then it may be possible to get them insured under the fleet insurance policy. This is because the individual risk of drivers is balanced out across the board.

4 disadvantages of fleet insurance

business fleet

While there are a number of advantages to fleet insurance, it’s also worth considering whether or not any of these five disadvantages might impact you before making your decision.

1. Risk calculated from all drivers

As your fleet insurance premium is calculated based on the risk of all drivers, an accident prone/higher-risk driver can increase your premium. This is because they can increase the perceived risk across all of your vehicles that they have access to.

Similarly, having a number of young drivers can also cause the same effect. While these drivers may not have a history of accidents, they are seen as higher risk because of their limited driving experience. 

In these instances it’s recommended that any ‘risky’ drivers have their own individual policy separate from the fleet.

2. Fleet size

The way fleet insurance works means that the larger your fleet, the better your deal. So having a small fleet may not necessarily lead to any noticeable savings and may be more expensive. This is especially the case if you are trying to cover all drivers of which some may be deemed as higher risk.

3. Policy terms and conditions

It is quite likely that your fleet insurance quote will include a vast number of policy exclusions, which may or may not affect your business. 

However, one that may be of importance, is that fleet insurance may prevent private use of the fleet. As such, if you or someone else relies on one of your fleet vehicles for personal use, then this exclusion may catch you out. 

Another important policy to adhere to is keeping your insurer updated with changes to your fleet. Failure to update your policy could lead to any claim being invalidated.

4. No NCD (no claims discount)

Unlike traditional car insurance, fleet insurance doesn’t offer no claims discount incentives. Instead the number of total claims across the fleet are taken into account upon renewal.

If your fleet is small (i.e. less than 10 cars) and your drivers are eligible for NCDs, then it may work out cheaper to opt for individual policies to profit from the no claim discounts.

7 ways to reduce your fleet insurance price

fleet of cars 2

Like most insurance policies, there are ways you can manage the risk of your fleet to drive insurance premiums down. Here are seven methods to help you reduce your fleet insurance price.

1. Consider fitting each car with a telematics device

Telematics or black box devices are a great way to reduce your premiums. By fitting each vehicle with one of these devices, you are offering insurers complete transparency. The technology will assess how safely your drivers drive and the data could lead to reduced premiums as you’ll be seen as more trustworthy.

However, they could also increase your premiums if your drivers are found to be driving recklessly. Use the data from the devices to review your drivers abilities and put a procedure in place to improve those that aren’t driving to standard.

2. Send drivers on advanced driving courses

driving course

While advanced driving courses won’t reduce your insurance costs in and of themselves, they will appear on your driver’s records. This demonstrates to insurers that your staff are actively taking steps to become safer drivers and this may help lower your premiums in the future.

3. Restrict employee driving age 

The age of your drivers can be incredibly influential when it comes to determining your fleet insurance cost. It’s no secret that young and new drivers pay the highest insurance premiums, with some paying over £1,000 a year on average for individual personal policies. 

As such, if you have drivers below the age of 25 in your fleet, they could be raising the costs of your insurance. To combat this, some employers restrict the minimum age of drivers to 25 or even 30 to help reduce their premiums. Others simply insure young/convicted drivers as named drivers.

4. Only claim when you need to

Limiting how often you claim will also lead to major savings. Even if your fleet is involved in numerous accidents each year, by only claiming when you need to you lower your perceived risk.

By frequently claiming, you’re suggesting to insurers that your drivers are accident prone. Even though claims may only be small, frequent small claims suggest an increased chance of larger claims in the future.

Moreover, while fleet insurance doesn’t qualify for NCDs some insurers may offer discounts based on how many claims you had across your fleet during your contract. If you make frequent small claims you risk the likelihood of not seeing any discounts.

5. Create a driver risk assessment process

Similar to restricting driver age, having a thought out risk assessment process can also help. By vetting your drivers before hiring them to ensure that they have a clean driving licence, you’re proving to insurers that you take matters seriously.

As part of your procedure, it helps to be using modern risk management technologies in your fleet such as automatic emergency braking, lane assist and traffic sign recognition. As all of this helps to reduce the likelihood of your fleet being involved in an accident.

6. Ensure vehicles are kept securely

Where you store your vehicles while not in use also plays an important role when it comes to reducing costs. Just as you would park your car on your drive or in your garage, where possible you should take all steps necessary to ensure your fleet is secure.

If possible, aim to keep your vehicles in a secure and locked compound overnight with CCTV. Not only will this reduce the likelihood that your vehicles will be stolen, you are also proving to insurers that your vehicles are secure which will lower premiums.

7. Increase your voluntary excess

When it comes to building your quote, you will be asked how much of a voluntary excess you would be willing to pay when making a claim. This excess will be taken from you and contribute towards the cost of vehicle repairs/replacement when you decide to make a claim.

By stating a higher voluntary excess, you are showing insurers that you won’t make any false or unnecessary claims as it will cost you financially. This can be an easy way to lower your costs.

Some employers go as far to levy this excess onto their drivers when a claim is made, to encourage safe and sensible driving.

Now that you know everything you need to know about fleet insurance, why not modernise your fleet to help lower your insurance premiums? Compare prices now on our latest lease deals for great offers.

Looking for help with insurance or leasing in general? You can find out more by heading over to our guides page.

Ready to secure the very best lease deal on your next car?

You're in the right place
Moneyshake has over 3 million live prices on site right now!

Compare lease deals now