Do You Need Fleet Insurance?

Do you use one or more vehicles for your business? You may need to consider fleet insurance.The quantity of vehicles that your business has doesn't matter what matters to the insurance company is exactly how you are using the vehicle. If you try to insure a business vehicle under a personal insurance policy (or vice versa) you may be denied a claim in the case of an accident.

As an example, you cannot put your vehicle under a commercial policy just because you drive your vehicle to work every day. There are of course exceptions for people that drive from site to site in their vehicle, but for just regular commuting your vehicle needs to be on a personal insurance policy.

The Right Insurance For Your Fleet

Vehicles that are driven just for the needs of a business need to be placed on fleet insurance or a commercial auto policy. The vehicle that is being used doesn't have to be a delivery truck or any other vehicle that would be driven for a business purposes only, it can also be a passenger vehicle that a business person uses to get from job site to job site to conduct business with clients. Even though the allowed use of the vehicle is different between vehicles on a personal auto policy and vehicles on a fleet insurance policy, the legal requirements of what is required are the same. The only difference is for vehicles that are being used to transport people (shuttle vans and taxi cabs) as these vehicles are expected to carry a higher amount of liability insurance than personal use vehicles are.

As in all cases, each state has their own fleet insurance requirements and your insurance agent will be able to make sure that you have the correct fleet insurance coverage that is needed in your state.

If your business needs require that you pull a trailer behind your commercial vehicle, no additional liability insurance is needed on your fleet insurance. This liability covers the trailer attached to the commercial vehicle that is hauling it. Coverage for any damages that happen to the trailer itself though do need to be added to your fleet insurance as this coverage does not extend back from the vehicle pulling the trailer.

Fleet Drivers Need to Be Listed

In personal auto insurance, the coverage follows the vehicle; regular drivers should be listed. For fleet insurance, every driver that will ever drive your commercial vehicles has to be listed on your policy. If a driver is not listed and they are in an accident, the claim will be denied under your fleet insurance policy. When you add a new driver to your policy the underwriter will accept or reject them based on their age and driving record. The reason for driver rejections can vary, for instance if your driver is under 25, is not properly licensed to drive the type of vehicle you are trying to add them to or has a tarnished driving record.

Fleet Insurance Coverage Is For Vehicles Only

If your vehicle on your fleet insurance policy is in an accident, the only coverage that is available is for the vehicle itself. Any accessories of the vehicle or attachments to the vehicle does not have any coverage under your fleet insurance policy those require different coverage. Inland marine policy may be needed if you transport equipment in your vehicle to make sure these items are covered.

In addition, your fleet insurance policy does not cover damages that are caused by you or your employees in the course of business. A commercial general liability policy (GL insurance) will need to be carried by your company to protect you from incidents like these. If you are in the construction field, you may already have a GL policy for your company as the "binder" that was required by your client before they would hire your for their job. If you need to ask questions about fleet insurance, what kind of coverage you need for your business or are concerned that you are not properly insured, talk to your agent.


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Todd Clay is a consumer-focused blogger who worked as an agent for the largest insurance company in the U.S. He now researches on issues such as fleet insurance. Find out if fleet insurance is what you really need, get rates by state, or grab a few auto insurance quotes in 5 minutes at: www.CarInsuranceGuidebook.com