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What is a Fleet?

A fleet is 2 or more cars or motorised vehicles belonging to a single company used for transporting goods and the day-to-day operation of the business. A fleet can have cars, vans, trucks, taxis, HGVs, and minibuses.

Fleet Management in South Africa

Since 2013, projections have been favourable for the growth of the fleet management market in South Africa. Originally, the percentage of business fleet vehicles was projected to grow to 32.5% in 2020. But in 2019, the percentage was already at 34.6%. Current projections forecast a penetration rate of up to 63.1% in the total population of vehicles owned by companies by 2023. Fleet management is popular, because it is cost effective, it distributes risk, and it can save your company money on insurance costs.

What is Fleet Insurance or Car Insurance for Businesses?

Fleet insurance can also be called car insurance for businesses and it covers all the vehicles owned by the insured business under one policy. Businesses can insure a fleet of motorised vehicles under one policy against risks like theft, fire, accidents, and third-party claims.

How Does Business Car and Fleet Insurance Work?

By insuring all the company’s vehicles under one policy, fleet insurance distributes the company’s risk broadly. The policy covers cars, trucks, and commercial vehicles in such a way that the insured company only needs to pay once for each type of risk. If the company had chosen to insure each vehicle individually, the company would effectively pay for each risk over and over (per vehicle).

The insured company usually only needs to pay a single monthly premium for all the vehicles in their fleet. This premium is often calculated using a single risk rate instead of having to assess each vehicle’s risk separately. Fleet insurance in South Africa can be customised to suit your business and fleet size.

Fleet insurance packages differ. Plans can include third-party only cover designed to mitigate liability risks related to your fleet, a combination of third-party, theft, and fire cover, and more comprehensive plans. You can choose insurance that covers any driver driving any vehicle, or you can choose fixed drivers for specific vehicles. Because fleet insurance saves companies time and effort, it is a popular form of insurance.

Who Needs Fleet Insurance?

Ideally, any business that owns more than one vehicle needs fleet insurance. If your business owns only one vehicle, you can purchase business insurance for cars. Companies that operate in the logistics and transportation industries can benefit from this type of insurance.

What Does Car or Fleet Insurance Cover?

Business car insurance covers as little as one vehicle, while fleet insurance covers a greater number of vehicles owned by your company. One policy can cover your whole business, from the CEO’s car to the delivery trucks. The amount of cover you get depends on the type of fleet or car insurance policy you choose.

The types of packages on offer can be categorised into three options: comprehensive fleet insurance, limited fleet insurance, and liability or third-party fleet insurance. Some insurers allow you to purchase optional added benefits that can be included in your policy such as travel outside South Africa’s borders, sound equipment, and cover for non-standard accessories. To learn more about what extras are available, you can inspect the policy before signing.

Comprehensive Fleet or Car Insurance

Comprehensive plans typically offer you the greatest amount of cover for a wide range of risks related to your business cars or fleet. Insured events can include damage and loss due to accidents, intentional acts like theft or hijacking, acts of nature like hail or floods, and fire. Third-party claims are usually covered, and comprehensive plans often include extras like car hire options and 24/7 helplines.

Limited Fleet or Car Insurance

What is covered will differ between various insurance providers. Generally, limited car insurance options include cover for fewer events. Theft, hijacking, and third-party insurance is usually included, but your fleet will not be covered against the cost of accidents to your company or for acts of nature.

Third-Party Liability Fleet or Car Insurance

Known as the most affordable type of fleet insurance, third-party only plans usually only cover claims against you in accidents involving vehicles from your fleet. If you are being held liable for damage or loss to other people or their property due to an accident involving your fleet vehicles, third-party insurance should cover the amount of the claim and legal costs.

Who Can Drive on Car or Fleet Insurance?

Some insurance providers allow for any driver to drive any vehicle, while other plans require you to select specific drivers for specific vehicles. Either way, drivers need to be licensed, and vehicles need to be roadworthy for claims to be accepted.

Read more about Cars/Fleet insurance

How Much Does Car or Fleet Insurance Cost?

Insurance companies usually determine the monthly premium for fleet insurance based on the size of the fleet, the type and age of the vehicles being insured, their condition, and your claims history. Routes driven and in some cases driver qualifications or records may also be considered. Fleet insurance tends to be more affordable than insuring each vehicle on its own.

Insurance companies may require a minimum number of vehicles in order to qualify for fleet insurance versus car insurance for businesses. All the vehicles must belong to the same company.

DISCLAIMER: The information provided in this article is meant for informational purposes only and should not be construed as legal, medical, or financial advice. Facts stated in this article are correct at the time it was published.

Sources: Garrun-Group; OUTsurance; prnewswire;

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