If you use vehicles for company business, you know company car insurance is necessary to protect your business assets and manage your liabilities. The potential for accidents is huge.
Every five seconds a crash occurs and many of them result in property damage, injury, or death.
The financial impact can also be devastating. The average crash costs an employer $16,500 and could be as high as $500,000 if a fatality occurs.
Depending on the number and types of vehicles your company has on the road, the cost of your commercial auto insurance can be high. But there are several ways to cut costs and save money on your vehicle insurance coverage.
Here are some money-saving ideas to help you get a great deal on your company car insurance costs.
Don’t Pay for Company Car Insurance Coverage You Don’t Need
Getting the right amount of coverage can save you money.
If you own, rent or lease company vehicles exclusively for company business and you have employees assigned to drive them, you probably need full coverage with adequate liability levels. The same holds true if you are in the vehicle rental business.
If your employees drive their own vehicles for company business, you need to cover liability risk on your company insurance. However, if you only use your own vehicle for business, your personal insurance may be enough.
In the event of an accident, you want to protect your company from losses. Commercial auto insurance offers higher liability coverage to manage the risk of an accident resulting in a major liability, like a fatality.
Your insurance costs, including liability levels, will depend on the type of business you have. Make sure you get adequate coverage for your needs but don’t pay more for coverage you don’t need.
How You Operate Can Save You Money
Where you drive and how far you drive affect the cost of your auto insurance. Depending on where you live, there are several factors that go into determining your auto insurance cost.
Your mileage is also a determining factor.
So, keeping good mileage records for your vehicles can help you save money on car insurance. If you give an estimate on mileage when coverage is purchased, and you can show your actual mileage was lower, you may get a reimbursement discount.
Enforcing safe driving habits for drivers can also help you save on insurance. Some insurance companies give discounts for safety practices.
Another reason to emphasize safety is to minimize the possibility of accidents. Here are some things you can do to improve safety and show insurance companies you are proactive:
- Check your employees’ driving records for moving violations,
- Allow for more time between deliveries,
- Educate employees on safe driving habits
Some companies enforce a zero-tolerance policy on bad driving habits like texting or eating while driving, and they reward drivers who have had no accidents. If you have a fleet of vehicles, you should implement an alcohol and drug use policy and consider having drivers sign agreements to company driving policy.
When an accident does occur, investigate the cause. If the problem was the vehicle, correct any issues to prevent future accidents. Keep good maintenance and inspection records of company vehicles.
If you have any drivers under the age of 25, you will pay more for insurance. Make sure that when their status changes, your insurance makes the adjustment on the policy.
Customization Options Reduce Costs
There are various ways you can customize your insurance policy that will save you money. For example, if you bundle your company car insurance with property insurance or workers’ compensation coverage, you will be able to get a better deal on the cost.
If your business uses company vehicles on a seasonal basis, it’s not a good idea to let your company car insurance lapse during the off-season. If you cancel your insurance, you may have to pay higher rates when you try to renew due to lack of continuous coverage.
One way you can save money if your operation is seasonal is to drop the liability and collision coverage and keep comprehensive coverage only during off-season. Comprehensive coverage will cover losses like fire, theft, vandalism, and other off the road damages.
Other customization options can include coverage for items like downtime loss, towing expenses, and rental reimbursement. If your business can cover these costs out of pocket, you can save by passing on those options.
However, if these benefits can keep you operating and generating revenue, it may be a good idea to add them.
Review Your Risk Factor
Your company’s operating history can help you determine your risk factor. If the number of claims you had in the past couple of years is low, you may consider raising the deductible on your company car insurance policy.
Increasing the deductible can lower your premium significantly. And if you can put money in an interest-earning account to cover the deductible if needed, you have a win-win cost-saving strategy.
Another way to determine risk is to look at the type of vehicles you have and your employees’ driving records. When an insurance company prepares a quote, they will ask you for information on your vehicles and your drivers to determine the level of risk.
According to Amistad Insurance Services, a lot of factors are considered when determining your insurance premiums. They include the following:
- Driving Record
- Type of Vehicle
- Overall Vehicle Use
- Driver Age, Gender, and Civil Status
- Credit Score
Vehicles equipped with safety features and great performance ratings are usually less expensive to insure. And if your company has filed no insurance claims in the recent past, you will qualify for a lower insurance rate.
How You Pay Premiums Can Save Money
You can score a discount on your company car insurance policy for paying in advance. If you are able to make an annual payment on your auto insurance premiums rather than setting up a monthly payment, you can save money.
If you are not able to pay up front, set up a draft and pay your premiums using Electronic Funds Transfer (EFT) from your bank account. This will also result in cost savings.
Ask If You Qualify for Discounts
Insurance companies offer several discounts for various reasons. Here are some possible discounts you could qualify for:
- Fleet discount for multiple vehicles
- Safety features discount
- Experienced CDL driver on the road more than 1 year
- Good driver “no accidents” discount
- Company claim-free period
- Continued coverage loyalty discount
- Employee safe driving course discounts
Different insurance companies will have different discount offers. Shop around to find one that fits your needs.
Cutting Costs on Company Car Insurance
Finding ways to cut your commercial car insurance can impact your profits in a big way. And it will ensure your company car insurance policy will be a great fit for your needs.
At Sebule, we’re about providing resources for businesses. We help businesses advertise on our free classified ads website. Visit our blog or contact us here for more ways your company can cut costs and increase profits in 2018.