Why is it so much cheaper to get multi van insurance on a fleet policy?

I’m regularly asked to look at insuring a  handful of vehicles, such as cars, sometimes vans, or a combination.

As I’ve said in previous blogs, most businesses with 2 – 5 vehicles tend to have separate single vehicle insurance policies, presumably because they’ve simply taken out a new policy as they’ve acquired a new vehicle.

When I’m asked to quote for multi commercial vehicle insurance, it’s my job to look at the existing arrangements and shop around to get the best price, but also to look at alternative options for the best price.

This week I was asked to look at insuring one van on its own.  There was nothing fancy about it and the driver’s track record was pretty good, yet the insurance company wanted around £1,200 to insure it.  The strange thing is, at the same time, I had another client, with similar vehicles and background, but he had 3 of them.  Now, because he had more than one vehicle, he was eligible for a mini fleet insurance policy, and so we looked at that for him.

If the single vehicle price was anything to go by, you’d expect he would have to pay three times that (£3,600) to cover all three, but in fact his total price to cover all vehicles was £2,500!! That’s a saving of over 30% just for putting the vehicles together on one policy!

Needless to say the cover was the same if not better, and the client was really happy.

Buy why is it cheaper to insure your vehicles on a fleet policy?

Well the first thing to say is there is no hard and fast rule with insurance; everyone’s needs and circumstances are different, but it certainly seems that there is a definite trend towards fleets making the overall spend lower for a business.

On a very basic level, one could argue that it’s because the insurer is collecting premiums for several vehicles and in doing so, is reducing its chances of having to pay a claim on the vehicles, as you’d have to be pretty unlucky to have three cars and an accident in all three in a year!

Then you have lower administration costs, as they are issuing one policy but taking in several vehicles worth of premium, allowing them to offer bigger discounts than single-vehicle insurers.

Whatever the reason, I know my fleet insurance clients are happy to know they’re saving money on their vehicle insurance and can trust their fleet insurance broker to shop around and explore all options every year.

“We have used Evans Insurance Brokers for our company fleet policy for a number of years now. We initially decided to use them due to the amount of money they saved on the policy with a better level of cover. What really impressed me was when we needed to make a claim on the fleet policy, it was dealt with in a professional manner without the normal level of fuss that you get insurance companies. From start to finish Evans insurance dealt with the claim, keeping us informed at every step. I would not hesitate in recommending them to anyone that has a requirement for a fleet policy.” – Rob Terry, Nationwide Ventilation