Commercial vehicle usage-based insurance, also known as commercial telematics, is a system that uses a GPS device to transmit data directly from your business' vehicles to your insurance provider. This data pertains to your driving habits. If you own a business that uses multiple cars as part of its operation, you may want to consider getting fleet insurance rather than individually insuring each one of your vehicles.
Fleet insurance is
basically a multi-vehicle insurance policy that can cover all of the different
vehicles your business uses for commercial purposes. By condensing the coverage
for all of your business' vehicles into just one policy, it can simplify things
for you, especially when it comes time to renew.
If you use telematics in all of the vehicles that are covered under a fleet insurance policy for your business, you can save a significant amount of money. As the data on your drivers' habits are monitored, your insurance provider may use it to determine whether you may be issued a discount on your insurance premium rate, which may be anywhere from 5% to 25% depending on various factors.
What is fleet insurance and how does it work?
When you own a business that regularly uses multiple cars,
vans, trucks, or any other kinds of vehicles, it is important to consider the
auto insurance options that are available to ensure you get coverage that
matches both the number of vehicles you have and the uses you have for them.
Although fleet insurance is generally best for companies
that operate in either transportation or customer service, as long as your
business has at least five vehicles registered under your company name, it can
be considered a good option. Fleet insurance will allow you to easily track,
manage, and renew the insurance for your fleet.
This type of policy also makes it easier for transferability
to take place since any driver at your company is allowed to drive any vehicle
covered by the policy.
Depending on the province that you're in, your fleet
insurance policy may include various types of standard coverages. Most fleet
insurance policies have bodily injury liability coverage, so you will be
covered if someone gets into an accident with one of your commercial vehicles
and causes bodily harm to someone in doing so.
Fleet insurance policies generally include property damage
liability coverage, so if an employee gets into an accident and damages one of
your vehicles, the cost of repairing or replacing it will be covered. Your
fleet insurance policy may also come with combined single limit (CSL) coverage,
which attaches the same dollar amount of coverage for any type of instance,
whether it involves bodily injuries or property damage.
Uninsured automobile coverage may be included, which
protects your drivers and any passengers in your vehicles in the event that
they get into an accident with an at-fault driver who is either uninsured or
Collision coverage may also be an optional addition if you would like to protect your company in the event that one of your employees is uninsured and gets into an accident.
How Commercial Telematics for Fleet Insurance Works
If you decide to enroll in a telematics program when signing
up for a new insurance policy, you will be given a small wireless device that
must be installed in your car's diagnostic port. This device will collect data
to monitor real-time driving behaviours so that your insurance provider can get
an accurate and objective idea of your driving habits.
Generally, the main factors that most insurance providers
are focused on include the distance that you drive, the time of day that you
drive, and when and how you accelerate and brake. If your insurance provider
determines that you have good driving habits or they can see you are gradually
improving your driving behaviour, they may grant you opportunities to save on
your insurance premium by offering discounts ranging from 5% to 25%.
These savings can be taken advantage of when it comes to
fleet insurance as well. If all of the vehicles in your fleet have telematics
devices installed, you could spend a lot less on your policy each month.
The other added benefit of telematics is that it will hopefully encourage all of your drivers to drive more safely and cautiously. The development of such habits will be good for your business in the long run by helping to minimize the number of accidents that occur involving company vehicles.
How to Save Money on Your Fleet Insurance
Aside from taking advantage of a telematics program, there
are a number of other ways that you can save money on your company's fleet insurance premium rate. One of the best ways to do that is by ensuring that
your fleet drivers have excellent driving records so that you can access
discounted premium rates. You may consider conducting regular driving license
checks to make sure that your drivers have disclosed any convictions that they
have on their record, as even small infractions can raise your rates
You can also drop your rates by increasing the deductible,
which is the amount your company will have to pay before coverage kicks in in
the event of an accident. As long as you are certain your company can afford to
pay the deductible amount, increasing it could save you a significant amount.
You may also be granted discounts if you purchase other types of insurance
policies for your business through the same provider.
Additionally, you can usually reduce your rates by installing anti-theft and safety equipment in your fleet's vehicles. It may also be necessary to start encouraging your drivers to implement risk management practices since doing so can help you prevent accidents and minimize the number of claims that you file. You can achieve similar results by seeking ways to minimize the amount of time your drivers spend on the road, if possible.
How Telematics and Fleet Insurance Can Save Your Business Money
It is extremely important to have insurance coverage for any
vehicles that are being used commercially by your business. That way, you can
avoid any trouble in the event that one of these vehicles ever gets into an
accident. However, it can be quite expensive and a hassle to individually
insure each vehicle that is part of your operation, especially when you have
many different vehicles.
Fortunately, fleet insurance could allow you to insure all
of your business' vehicles under a singular policy, saving you time, effort,
and money. You can also reduce your rates in various other ways, such as by
ensuring that your company's drivers have clean records, increasing your
deductible, installing anti-theft and safety equipment in your vehicles, and
implementing risk management driving practices.
Of course, one of the best ways you can save is through
telematics programs that reward good driving behaviour with significant premium
discounts. If you implement all of these strategies, you will no longer need to
worry about costly auto insurance, and your business can save a large amount in
the long term.
Jessica Coates is a blogger in Toronto. She graduated with
honors from the University of British Columbia with a dual degree in Business
Administration and Creative Writing. Jessica Coates is a community manager for
small businesses across Canada. When not working, she leisurely studies
economics, history, law and business solutions.