Finding the right insurance plan to cover an entire fleet of vehicles is not as simple as finding a personal auto insurance plan. A host of variables must be considered, and technology—such as electronic logging devices, dashcams and telematic systems that monitor everything from hard stops to stops at the donut shop—have changed the game.
Finding the Right Plan
Choosing the right plan for a fleet of vehicles starts with accounting the types of vehicles and finding the right insurer, says Sandra Peters, an insurance sales representative for Wieczorek Insurance, which partners with the NH Motor Transport Association and Vermont Truck and Bus.
“Commercial claims are unique and complicated. If a commercial truck is damaged, it is considered loss-of-use and you can’t just go out and rent another one,” she says, citing septic haulers, fuel trucks and garbage trucks as examples. “Those are specialty vehicles, and those are things people need to keep in mind when getting a quote for insurance. And it’s important to look closely at the company you’re quoting with. Not all companies are able to handle commercial insurance.”
Trucks, vans or any vehicle pulling a trailer with a gross vehicle weight rating of 26,000 pounds or more are required to register for a Department of Transportation (DOT) number, Peters says. “So, businesses should start with the type of vehicle and what their intentions are. From there, a professional can lead you in the right direction,” she says. “I can look at the fleet vehicle list and help people with the DOT number and let them know what their requirements are. And the minute someone applies for that DOT number, New Hampshire is fantastic helping people through the process.”
Peters also advises clients to consider annual record checks on all drivers to ensure they have less than two minor incidents—such as minor speeding and/or inspections violations—with no major driving incidents within the past five years.
Business owners should also check their fleet daily by performing pre-trip and post-trip inspections to make sure vehicles aren’t damaged and that tires are inflated properly, Peters says. “If a company doesn’t have a mechanic on staff, and most don’t, it is important to have a contract with a garage to get the vehicle back on road,” she says, explaining that maintaining safe vehicles—especially DOT vehicles— can cut back on time spent on roadside inspections. “The safer a vehicle is, the faster you can get on your way,” she says.
Still other things to consider include the physical fitness of employees and drug testing, Peters adds.
Using Fleet Tech
Technology can help take some of the gray areas out of fleet vehicle claims, Peters says. “Technology can help take away the ‘he said-she said’ situations that can happen when a driver says someone cut them off and had no choice, and the other person says ‘no, they just hit me,’” she says. “The dash camera has changed the industry of insurance from a liability standpoint and has made a huge difference in finding fault for small companies with one or two vehicles to those with hundreds.”
Peters highly recommends dash cameras and vehicle telematics, which combines GPS systems and onboard vehicle diagnostics that record and transmit vehicle data, such as speed, location, maintenance requirements and servicing.
“Let’s say you have a local landscape company. A telematics system can tell the fleet manager the speeds their drivers are going. It can tell them when there is hard breaking or quick turns,” she says. “It follows the driver in all their driving capabilities for the day and monitors them, so managers know they’re not stopping for donuts when they’re supposed to be working. A dash camera can be worth its weight in gold.”
In an era of “nuclear verdicts,” cameras and telematic devices can help exonerate a company if they didn’t do anything wrong, and they can also identify unsafe behavior by employees and “let the company address it from there,” says NH Motor Transport Association President Joe Sculley.
Managing Risk
Some companies opt for self-insured plans. Businesses opting for a self-insured plan pay directly for any covered damages or injuries, potentially resulting in significant out-of-pocket expenses if involved in an accident. With full insurance, companies pay fixed monthly premiums, regardless of whether any claims are filed. This provides predictable costs but can be expensive, especially for high-risk drivers.
Merchants Fleet provides fleet management services to various businesses, including corporations, government institutions and last-mile delivery partners. The company specializes in maintenance and repair services, fuel management, consulting services and vehicle leasing options. Tim Mundahl, a Merchants Fleet consultant, says many of the 209,000 vehicles that Merchants leases are self-insured from a collision perspective. “It makes sense to be self-insured,” he says. “The same expected payouts we can assume for bent metal are what the insurance company is going to use to build out for the cost.”
One of the unknown liabilities—because companies don’t have enough data—involves the electrification of fleets, Mundahl says. “If you have an electric vehicle that gets in an accident and the battery is damaged, that’s a lot more expensive than a typical accident or incident-related repair,” he says. “The other thing to think about is the cost of glass.”
In the past, windshields could be replaced for $200 to $300, Mundahl says. But today, because of cameras and other safety features, replacements can run from $1,500 to $2,000.
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