Trucking insurance comes in many shapes and sizes, and this vast array of options only becomes more complex when you consider the differences between insuring, say, a single truck versus an entire fleet of vehicles and drivers.
The good news is that both types of insurance have their advantages, and with a skilled insurance agent, it can still be simple to acquire fleet insurance despite the additional underwriting requirements. Here’s what you need to know about fleet versus non-fleet trucking insurance, how they are categorized, and which one might be right for you.
What Defines a “Fleet”?
A “fleet” is a group of vehicles. They need not all be the same type of vehicle—some companies may have, for example, some delivery trucks, several taxis, and a number of passenger vehicles, for example—but fleets can also comprise multiple identical vehicles. To determine how many vehicles it takes to be considered a fleet, you will need to speak with your insurance agent.
Sometimes, a state or municipality will determine how many cars or trucks it takes to constitute a fleet (usually around five), but insurance companies tend to place this bar a bit higher, at somewhere between 10 and 20.
If you only have two or three trucks, you probably do not qualify as a fleet just yet.
How Non-Fleet Trucking Insurance Is Underwritten
Non-fleet trucking insurance is the type that most people are familiar with. This is your standard coverage for general liability, physical damage, and more, all insured based on the driver of the vehicle. An insurance agent will review the risk posed by that specific truck in order to determine coverage amounts, premiums, and other elements of the policy.
During underwriting, the agent will likely look at the driver’s age, the years of experience they have driving that type of truck, and any previous accidents or violations (like DUIs or speeding). The insurer will also review where that truck travels—whether it is across state lines (interstate) or only within one state (intrastate)—as well as the type of cargo that is being transported. All of these elements impact the underwriting of a standard non-fleet trucking insurance policy.
The Difference in Fleet Policies
In contrast to non-fleet options, fleet trucking insurance involves more underwriting. There are more trucks, more drivers, and more potential hazards when dealing with an entire group of vehicles, so it is only natural that you will be required to furnish more information when applying for a fleet policy.
The most common elements that insurers review for fleet coverage are driver turnover at the company and the frequency of claims across all vehicles. Companies that rarely make claims are much more likely to be successful, and if their drivers stay for a long time, the insurer can feel more confident that the trucking business is employing experienced individuals to operate their trucks.
The Advantages of Fleet Trucking Insurance
Fleet trucking insurance offers some distinct advantages over insuring each truck individually. The biggest benefit is that drivers can usually be assigned to any truck with little to no hassle. This is in contrast to non-fleet policies, where coverage is based on that specific driver’s history, experience, and more—preventing them from hopping from truck to truck at their leisure.
Additionally, it is usually more expensive to insure multiple, individual vehicles than it is to cover an entire fleet. Thus, after a certain point, companies and drivers who continue to operate vehicles that are registered as non-fleet can begin to lose out on monetary savings in their insurance rates over time.
Exactly what this “certain point” is will depend on your unique situation; sometimes, trucking companies do not reach this financially beneficial threshold until as many as 20 vehicles are present in the fleet. Your insurance agent can help you to do these calculations and understand when the transition from non-fleet to fleet coverage could make sense for you.
Trust the Pros to Help You Correctly Establish the Right Insurance Coverage
Whether you are just considering the purchase of another vehicle to start the growth of a fleet or you already have a lot of trucks and want to know if fleet coverage is more beneficial than what you currently have, be sure to work with the professionals.
The experts at Burton & Company will help you run the numbers to determine whether the switch to fleet coverage is right for you—and whether you are eligible in your current situation. Reach out to learn more or to schedule an appointment to get started.
