As an enterprise grows, the number of vehicles it owns bulge into a fleet especially if its line of trade entails movement of goods from place to place. The law does not exempt a company automobile from basic road insurance policies, which also protect the vehicles against theft, damage and other distasteful eventualities that may result in a loss for the firm. The policy can cover each vehicle, making up the entire fleet. The other option is to bundle them together to cover them as a fleet. In case you are not sure which way to go, below are some pointers on why fleet insurance is a better choice in comparison to the single cover policies.
The economy of scales is an economic concept that is applicable in every sector, the insurance industry notwithstanding. It follows that fleet insurance policy cover lowers your premium rates owing to the hefty discounts that it attracts. The deal gets better if a company has a team of dedicated and experienced drivers with accident-free professional pasts. This is because many insurance firms price their premium payments based on the number of claims that a business is likely to place in a year.
Note that fleet insurance price tags also depend on your line of business. Commercial vehicles that belong to the taxi or the public transport sectors attract different premium rates in comparison to delivery vans’. In case your company’s fleet has a mixture of these vehicles, you end up paying different premium prices, pushing up the overall cost. Fleet insurance cover is, therefore, a significant insurance premium cover price harmonization tool worth considering.
It is true that customer is king in any business and all of them should be treated with the same degree of honor and decorum. Whereas this sales mantra holds on paper, it does not work in reality. An insurance company will always offer faster and more reliable services to fleet insurance clients. They contribute more toward the common pool of insurance, giving them a better ROI. The VIP status also provides you with a stronger voice on the negotiation table in a way that enables you to have your claims processed fast and reliably at an exclusive price.
Without a doubt, insurance premiums are expenses. You subsequently deduct them from your firm’s overall income and mention it in the tax return forms. Companies that do not follow this through in an organized manner end up paying the wrong amount of money in taxes. Legally, this is not a standard business practice, and it amounts to tax fraud, which attracts lawsuits, fines, and bad business reputation.
Avoid falling into this trap by having your firm’s vehicle’s insurance policy cost rounded up into a single figure and paid in return for a single fleet insurance receipt. The idea is to cut down on paper work and boost record management to make your tax return filing work easy. Less paper work and record management stints also mean leaner business strategies that focus on minimizing overhead and wage bills in favor of a higher return on investment or ROI, for short.