Fleet insurance enables business and large families to insure several vehicles under one policy. This can help reduce administration time spent on policy renewals and claims and provide savings depending on the number of vehicles being insured. But what about young drivers? Insurance policies for young people are well-known for being expensive due to the increased risk factor from lack of driving experience but does this mean it's impossible to get young drivers insured on fleet policies?
Named driver or any driver?
Different insurers will have different rules regarding age restrictions so it's always best to check with the provider first. Typically, an employee must be 25 or over to be a policyholder, although some insurers will allow this for adults as young as 21. However, this doesn't mean employees under the specified age on your policy are not permitted to drive company vehicles, just that they may have to be named drivers instead. While this is a workable compromise for businesses with young employees, you should always check the terms of your policy. Being a named driver often comes with restrictions such as they should never drive a vehicle more regularly than the policyholder.
Premiums for young driver likely will be higher than the other age groups because police data shows that drivers under the age of 25 are more likely to be involved in road accidents than older drivers. This means that if your business does employ a lot of young people, be prepared to pay higher premiums.
An alternative may be to consider an 'any driver' policy. Many fleet insurance policies will allow you to add the optional extra of 'any'. This means that any driver can drive the vehicles covered under the policy, providing more flexibility for businesses. This type of policy can be very useful if you have a lot of employees (or in the case of family fleet insurance, friends and family) who may need access to vehicles covered under the policy. Any driver policies allow them to use any vehicles without having to notify the insurer first. However, there may still be some age restrictions with this optional extra so you should check with the insurer first. While they offer a lot of flexibility, they are often more expensive than named driver policies. This is because insurers consider it to be a higher risk as, to them, you are allowing strangers to drive your car.
Two vehicles or three?
While some insurers will permit fleet policies for as little as two vehicles, they will usually only permit drivers over the age of 25 to be named on a policy. Because of the limited number of insurers who offer fleet insurance for two vehicles, it may end up costing more than if you were to insure three vehicles or more under one policy. This is because there are more insurers offering fleet insurance for three vehicles or more and therefore offers a more competitive market. When comparing prices for fleet insurance, it's worth checking to see if adding a third vehicle (be it a company car or a run-around) could bring the cost of the policy down.
Cover type and optional extras
When it comes to fleet insurance, as with other types of auto insurance, there are three basic levels of cover:
- Third-party only - this covers the cost of injury and damage done to other people and their property. This is the minimum level of cover required by law.
- Third-party, fire and theft - this includes third party plus cover for the policy holders vehicle if it has been stolen or damaged by fire.
- Comprehensive - offers everything from the previous levels of cover and the cost of damage to your vehicle if you're in an accident.
Fleet insurance also offers extra policy features that business owners should consider to ensure full protection. These include:
- Breakdown cover - this provides roadside recovery that can be incredibly beneficial for any business whose drivers are on the road a lot.
- Goods in transit - will cover theft or damage to any goods that are stored in the vehicle.
- Employers liability - this is required by law for businesses with employees. It will provide cover if an employee becomes sick or injured because of work.
- Public liability - this isn't required by law, but it is highly recommended. It will cover any legal fees and compensation if a member of the public is injured or suffers property damage and blames the business.
Lowering the cost
While fleet insurance can save businesses money when compared to separate policies, it can still be quite costly, especially if young drivers are added. there are a few things that can be done to hep reduce the cost of a fleet insurance policy such as:
- Pay for cover annually rather than monthly. Paying for policies monthly is seen as a loan so interest will likely be added.
- Opt for a higher voluntary excess. Agreeing to pay more in the event of an accident will encourage the insurer to charge less for cover.
- Avoid vehicle modifications. Modified vehicles are an increased risk of being stolen and can increase premiums.