The more than 8 million fleet vehicles in the United States come in all shapes and sizes from smart cars to cargo vans to semi-trailer trucks, but they all have one thing in common: they need to be insured to protect your business assets.
It is a numbers game, after all, as the more time your fleet vehicles spend on the road, the greater chance your company will be exposed to the risk and liability that comes with an accident.
“The annual accident rate for commercial fleets is around 20 percent, with some industries, such as pharmaceuticals, even higher. One reason for the high frequency of accidents for fleet drivers is because of the number of miles they drive per year,” said Automotive Fleet. “A typical non-fleet driver in the U.S. travels 12,000 to 15,000 miles annually, and each year has a one in 15 chance of being involved in a vehicle collision. Most fleet drivers, however, travel 20,000 to 25,000 miles or more each year, and thus have a greater exposure to crash risks.”
The cost of not having the proper fleet vehicle insurance can be devastating for a business with DriveSafe Online estimating that the average cost for an accident involving a driver in your fleet is $74,000, but that figure jumps to $500,000 if the crash causes a fatality.
“Vehicle accidents cost employers $60 billion each year in legal and medical expenses, property damage, and lost employee productivity,” says DriveSafe.
While inflation and supply chain issues have combined to skyrocket the cost of new and used vehicles, the cost of repairing or replacing a vehicle may just be the starting point for the financial implications involving an accident.
“Legal implications are another key area to consider, with the total cost of a fleet insurance claim being estimated up to 36 times higher than just the cost of repairing a vehicle,” said the Together for a Safer Roads campaign.
Your business fleet may be as small as two cars servicing a small town to 2,000 vehicles working across multiple states.
“A fleet vehicle is any motorized asset used by a company to transport people and products, conduct business, or assist with daily activity,” says Coast, a solution for managing fleet expenses. “A fleet can consist of any number of vehicles – 2, 5, 10, 25, 50, or more.”
Coast says businesses operate fleet vehicles based on the type and amount of cargo intended to transport, as well as distance that must be covered. Physical specifications for fleet vehicles might include:
Depending on budget constraints, companies must choose between leasing and purchasing their fleet vehicles.
The number of vehicles in your fleet will matter when it comes to “fleet status” with auto and truck manufacturers, and for qualifying for fleet insurance with insurance providers.
According to businessfleet.com, “generally, for most of the domestic manufacturers, companies qualify by:
According to automotive-fleet.com, as of 2019, there cars and class 1-5 trucks in service as part of fleets according to the above definition included:
Fleet vehicle insurance can fall into small fleet and large fleet categories with each insurance company setting their own standards.
Different providers may require your fleet to have 2, 3, 4, 5 or more vehicles to qualify for small fleet coverage. Large fleet coverage can start at 20 or 30 vehicles, depending on the provider.
Fleet insurance can help companies mitigate the risks of operating their fleets and protect their business assets.
“Fleet insurance allows organizations to protect all of their assets under a single policy. Not only is fleet insurance less expensive than holding individual policies for each vehicle, but fleet insurance also caters to the specific needs of businesses,” says Fleetio.
The benefits of fleet vehicle insurance include:
“When choosing the right coverage for your fleet, think about the risks associated with the types of assets in your fleet. Leverage any fleet data you have available, consider your surroundings and speak with insurance professionals to determine what is best for your fleet,” says Fleetio.
According to Motor1.com, the main types of fleet vehicle insurance start with the minimum coverage required by state and federal regulations such as:
Other fleet vehicle insurance coverage that companies can opt for include:
Dean & Draper can help your company design a complete risk management program that includes making sure you have the right fleet vehicle insurance coverage.
Dean & Draper is a Trusted Choice insurance agency representing numerous insurance companies. For over 40 years we have offered a trusted freedom of choice to our clients. Contact Dean & Draper today.
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