Does Your Business Need Fleet Vehicle Insurance?

What Is the Difference Between Commercial Auto and Fleet Vehicle Insurance?

Commercial auto insurance and fleet vehicle insurance typically provide similar protections for vehicles used for business purposes. Those vehicles may be cars, SUVs, pickup trucks, vans, and trailers. Whereas commercial auto insurance covers damages to a single vehicle and driver and passenger injuries, fleet vehicle insurance is designed to provide the same protections for multiple vehicles you own.

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The benefit of purchasing a fleet vehicle insurance policy for five or more business vehicles is two-fold: it ensures your vehicles are protected and can save you money. For instance, buying one fleet vehicle policy to cover five SUVs your business owns is typically cheaper than buying five commercial auto insurance policies.

Furthermore, depending on the size of your vehicle fleet, you could save a substantial amount on an annual premium. Many insurance providers will offer more flexible premiums to win your business if you’re insuring a sizable fleet.

What Does Fleet Vehicle Insurance Include?

Commercial fleet vehicle insurance features the same provincially mandated coverages a private-passenger policy includes. These are:

• Third-party liability. If you get into an accident for which you are deemed responsible or at fault, third-party liability coverage will cover the cost of damages and injuries to another driver or person or their property.

• Accident benefits. Accident benefits cover your expenses if you are injured or killed in a car accident. These benefits usually include income replacement, coverage for medical rehabilitation, and funeral and death expenses.

• Uninsured auto. If you are involved in a collision with an uninsured motorist deemed to be at fault for the crash, an unidentified motorist, or a driver who commits a hit-and-run, uninsured automobile insurance is designed to compensate you for damages to your vehicle, medical expenses, or compensate your family if you are killed. 

• Direct compensation-property damage (DCPD). In provinces with no-fault insurance systems, such as Ontario and Alberta, DCPD allows you to deal with your insurance provider directly for compensation if you are hurt or your vehicle is damaged in an accident that you did not cause.

There are optional coverages you can choose to add to your policy. Among the most popular are:

• Collision or upset insurance. If you get into an accident with another vehicle or smash into a stationary object such as a traffic light, collision insurance will cover the cost to repair or replace the vehicle up to its coverage limit minus a deductible.

• Comprehensive insurance. Comprehensive insurance covers the cost of repairs or replacing your vehicle if vandalized, stolen, or damaged by fire, an explosion, severe weather or flying objects, or because of a collision with an animal that suddenly darts out into the road in front of you while driving minus a deductible.

• All perils insurance. A combination of collision and comprehensive coverages, all perils insurance also includes coverage for damage or loss to your vehicle if it’s stolen by one of your employees or someone who lives with you.

What Does Fleet Vehicle Insurance Not Cover?

Commercial fleet insurance is only available to business owners with five or more vehicles to protect. For example, a family cannot purchase it to cover the cars driven by primary and secondary drivers who live together. In addition, it does not provide coverage for personal use of any business vehicle or privately owned vehicles that your employees use to do their jobs.

What’s the Difference Between Named Driver and Any Driver Fleet Vehicle Policies?

A business owner can also assign specific employees as drivers for each vehicle (sometimes referred to as a ‘named driver’ policy) or broaden the scope of coverage to include any employee driving any of the vehicles listed on the policy (an ‘any driver’ policy). Usually, any driver fleet vehicle policies offer the most flexibility, but they also tend to cost more than a named driver policy.

Does Private-Passenger Auto Insurance Cover Business Vehicles?

No. Generally, a private-passenger car insurance policy is not designed to protect a vehicle used for business purposes. 

There may be exceptions depending on your policy and the insurance provider underwriting it. For example, if yours is a home-based business and you use your car to drive to a client’s location for a meeting, you may be able to add occasional business use to that policy. But don’t assume that’s the case. Contact your broker or insurer and ask if your policy provides business usage coverage and how much.

However, most small business owners require a commercial auto policy to cover the car or truck they regularly use for work purposes. Also, know that commercial auto policies may cost slightly more than private-passenger ones because business vehicles require higher liability and property damage coverage limits, as they are typically at greater risk of collisions or are more likely to be targeted for vandalism or theft.

How Is the Cost of Fleet Car Insurance Determined?

Insurance providers consider several factors when determining what the cost of a commercial fleet vehicle for your business should be, including:

• The number of vehicles in your fleet and the type of vehicles
• The industry your business is in and the location of your company
• The annual mileage each vehicle will travel and where they are regularly parked or stored
• What the vehicles are used for (transporting goods, people, or both)
• Your business’s auto collision or claims history
• The number of drivers you have, their ages, genders, years of experience as drivers, and respective driving records
• What your policy’s coverages are, their limits, and the deductibles

When choosing the fleet vehicle policy that suits your business, you can decide whether to pay your annual premium upfront or in monthly or quarterly installments.

How to Lower the Cost of Your Commercial Auto or Fleet Vehicle Insurance Policy

One of the biggest gripes vehicle owners have when buying auto insurance is how expensive it can be, even if you’ve had no accidents or filed any claims for damage or loss with your insurance provider.

Unfortunately, today’s vehicles are more expensive to build and maintain. In many cases, the more electronics and computer-driven systems a vehicle has, the higher the cost to repair or replace it. That’s one major reason the cost of personal and commercial auto insurance policies tends to increase year-over-year.

Here are a few ways you can try to lower your annual auto insurance premium:

• Shop Around. It’s not uncommon for business owners to automatically renew their policies with the same provider, but it might not always be your best option. Taking a few minutes to get a free quote for your commercial auto or fleet car insurance from multiple providers through Zensurance is a quick and easy way to determine if you’re getting the maximum protection you need at the best price.

• Increase Your Deductibles. A deductible is the amount of money you must pay first when filing a claim for damage or loss before your insurance provider pays. It’s typically around $1,000 on a commercial auto policy, but you can increase it. The higher the deductible, the lower your annual premium.

• Ensure Employees Have Clean Driving Records. Only allow employees with clean driving records to operate your company’s vehicles. One of the factors insurance providers look at when pricing your policy is the driving records of the employees behind the wheel.

• Have Employees Take a Defensive Driving Course. Anyone can benefit from a defensive driving course, whether it’s the first time or a refresher. Get your drivers trained by professionals recognized by your provincial transportation ministry.

• Install Winter Tires. Have winter tires installed on your vehicles from November to May. Winter tires are designed to grip the road more effectively in snowy, wet, and icy road conditions and can help prevent accidents.

• Invest in Fleet Dash Cameras. Installing dashboard cameras in your fleet’s vehicles can serve a couple of purposes: exonerate your employees if they get into an accident for which they’re not at fault and monitor how your employees drive, which helps reduce risky driving behaviour.

• Store Your Vehicles in Secured Lots. After the working day, ensure your company’s vehicles are parked, locked, and stored in a garage or parking lot on your premises that is secured by fencing and features a 24/7 monitored video surveillance system.

4 Tips for Avoiding Motor Vehicle Collisions

Keeping your commercial auto or fleet vehicle insurance premium low means avoiding getting into a collision. Here are four tips for you and your employees to keep in mind when behind the wheel:

• Adapt to Driving Conditions. In winter or stormy weather, slow down and increase the amount of space between your vehicle and others in front of you, and don’t use your vehicle’s cruise control function in such conditions. Drive with your entire headlight system on in bad weather and early mornings, evenings, and at dusk.

• Don’t Be a Distracted Driver. Refrain from fidgeting with a handheld mobile device while driving or even when stopped at a red light, stop sign, or in a traffic jam. Avoid eating or playing with the vehicle’s infotainment system while driving. Keep your eyes and mind on the road and your hands on the steering wheel.

• Mind Your Speed. Drive the speed limit. Speeding is one of the leading causes of auto accidents, injuries, and deaths on our roads. 

• Don’t Drive Fatigued or Impaired. Drowsy drivers who don’t get enough sleep are significant risks on the road. Drinking more coffee cannot compensate for adequate sleep. Likewise, never drive any vehicle after consuming alcohol or drugs.

How to Get the Fleet Vehicle Insurance Policy Your Business Needs

Let us take the hassle of insuring your company’s vehicles off your hands, and we’ll steer you in the right direction. 

Fill out an online application for commercial fleet vehicle insurance from Zensurance to get a free quote. Through our partner network of more than 50 insurance providers, we’re confident we will get the protection you need at a price that’ll rev your engines. Our friendly broker team is available by email, live chat, or phone to answer any questions you have about your policy and insurance needs.