Motor Fleet Insurance

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Motor fleet refers to the owner of multiple vehicles at a single point in time; typically for business or for your interests. In such a scenario, you must avail motor fleet insurance policy.

Insuring your motor fleet can be quite a feat!

What is motor fleet insurance?

These policies cover four or more vehicles under a single umbrella policy. This is an easy and effective means to insure your multiple vehicles in bulk; and that too from the same insurer at competent rates. Instead of availing of motor insurance for multiple vehicles, the insurer provides a discount on the premium.
Most insurers offer motor fleet insurance to all types of commercial vehicles small, medium and large. However, the discount for the same depends on them, based on the valuation of your vehicles and the number of vehicles.

Inclusions of motor fleet insurance cover

  1. Single cover for multiple vehicles:

    The motor fleet insurance policy overs a single cover for multiple vehicles, it is easier to manage one single policy as against multiple heterogenous policies across different insurers. The sum assured premium and tenure have to be managed separately in the case of motor fleet insurance. Insurance companies identified the need for a policy that could offer coverage to a number of vehicles and drivers under a single policy. This provides you with just one renewal date and a premium payment due date to manage.

  2. Coverage for vehicle damage:

    The motor fleet insurance offers coverage against loss or damage to the vehicles by untoward instances such as accidents, burglary, fire, accidents etc., The fleet insurers typically offer coverage for any unintended accidents which could otherwise result in phenomenally huge out-of-pocket expense. There are instances when the insurer has approved the settlement of claims by swapping the damaged vehicle with a new vehicle. You can get coverage for any damage to vehicle accessories, bumpers, bonnet, tyres etc. as well.

  3. Cover for drivers of the vehicles:

    There are many fleet insurance companies that offer coverage for injuries that the driver of the vehicle may be subject to while on duty. This is particularly imperative when the vehicle has been in an accident and there are injuries to the vehicle driver. The driver of the vehicle at that point in time will get coverage for medical assistance and treatment, the driver may be an employee or yourself.

    There is a provision under which you can also get your employees’ vehicles under the coverage of the motor fleet policy.

  4. Coverage for legal obligations:

    The highlight of availing motor fleet insurance policy is that it offers coverage against any business or legal obligations. If due to an accident, there is litigation between the particular vehicle and the owner of the vehicle, then this policy will provide the necessary monetary assistance. These cases fall under the jurisdiction of the motor tribunals. The costs related to the same are under the coverage of the insurance plan.

    Depending on the overall sum assured and scope of coverage, it may also cover the court fee and settlement charges. This reduces the financial burden of the owner of the fleet to a very large extent.

Thus, motor fleet insurance can provide very comprehensive coverage by covering punitive damages, litigation costs, and medical expenses for drivers/employees, this may not be available under a general individual motor insurance policy.

Exclusions of motor fleet insurance cover

  1. Regular wear and tear on vehicles:

    Every vehicle requires frequent maintenance, typically the motor vehicle will undergo a thorough evaluation which could cost based on the fitness levels of the vehicle. This is not just essential for continued usage of the vehicle but also for the longevity of the vehicle.

  2. Lack of license while at wheel:

    If your vehicle meets with an accident by a driver at the wheel without a license, then the insurance company will not pay for the damages. If the policy covers medical assistance for the driver, this scenario may not be eligible for those claims as well.

  3. Driving under influence:

    If the driver was under the influence of any toxins such as alcohol, drugs etc., then the insurer will not honour the claim.

  4. Oil leakage:

    If you do not maintain the vehicle appropriately, it could lead to deterioration of engine health. There are times when oil leakage leads to engine damage. Usually, oil leakages need to be checked as part of regular maintenance.

    If it is established that the engine damage is due to oil leakage, then the insurer is not obligated to offer coverage for the replacement of the engine.

  5. Third-party driver:

    If the vehicle undergoes damage when a person not mentioned in the policy is driving it, then the coverage is not available for the vehicle and for any medical assistance towards the driver not mentioned as insured in the policy.

  6. Miscellaneous items:

    Electrical wastages like the alternator, and sparking in the ignition are part of the regular maintenance. Hence, it is usually excluded. Tires and tubes replacement and repair are not covered unless it is for one of the insured vehicles and falls within the coverage scope.

  7. Violations:

    If you happen to damage the vehicle due to any violation of auto manufacturer’s guidelines or road transport regulations,  then your insurance might not cover the same.

  8. Geographic bounds:

    Any damage to the vehicle within the mentioned geographical bounds is eligible for insurance coverage.

Additional Read: How Fleet Insurance can help SMEs manage their commercial vehicles?

Determinants of premium:

Amongst the number of factors one should consider while availing of motor fleet insurance, here are a few prominent ones:

  1. Type of vehicles:

    Most of the fleet motor insurance companies extend the policy for vehicles which are of similar type or for a set of vehicles that vary in valuation, size and make. This is one of the key detriments of the premium amount. The premium payable for a set of vehicles that are of the same type/valuation will be different from the premium payable for a set of vehicles that are of varied types.

  2. Number of vehicles:

    Motor fleet insurance is typically extended for 3 or more vehicles, there is no limit on the number of vehicles. However, this will also be a key detriment to the premium amount. A larger number of vehicles on the one hand creates a larger risk pool. However, the monitoring and maintenance of a large set of vehicles can be a challenge.

  3. Age, model of the vehicles:

    Like all other motor vehicles, the premiums on the motor fleet insurance depend upon the model/make and the age of the vehicles. Alongside this, the condition of the vehicle is critical to avail competent premiums. By maintaining your vehicles in a good condition, you will be able to get optimal coverage for lower premiums.

  4. Driver records:

    The insurer will consider the driver’s history and experience to determine the premiums of the fleet insurance. In either case, motor fleet insurance is much cheaper than purchasing individual insurance for all your vehicles.

Sunset clause on motor fleet insurance policy

All motor fleet insurance companies come with a sunset clause. This clause is applicable after the expiration period of the policy. As per the sunset clause, there is an additional period of 2-3 years (depending upon the insurer); where the claim on the insured vehicles can be settled even after the expiry of the motor fleet insurance policy. A sunset clause provides an additional time limit up to which the insured can report and claim damages on the vehicles insured. If you raise a claim beyond the pre-determined period under the sunset clause; it won’t be entertained.

Motor fleet insurance is the most logical insurance policy to avail yourself of if you have more vehicles to manage. This is not only convenient but is also easy on your pocket. Like all other insurance plans, it is best if you can do a comprehensive comparison of all the plans available; and then choose the one that aligns best with your requirement. You can visit SecureNow to help you with a comprehensive comparison of features across all the motor fleet insurance policies available.

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