Are you looking to add a new vehicle to your commercial fleet?
You may be wondering how this may impact your commercial Fleet insurance .
Will adding a new vehicle raise my premium significantly, pro-rata with other vehicles in the fleet, a little or not at all?
Your concern may be justified as predicting insurance rates can be quite tricky. Here are several factors that may dictate what happens to the premium.
Table of Contents
Make And Model:
Cars of a low value with small engines may only increase your fleet insurance cost slightly and bring your average cost per vehicle down. However, if the new business vehicle is expensive and high powered, the insurance premium may increase substantially and your overall cost per vehicle can go up.
Safety Rating:
The Australasian New Car Assessment Program awards safety ratings based on the crash tests being performed on the cars.
Vehicle safety can be a rating factor if you are looking to add a new business vehicle to your fleet. Especially if you are looking to add an older vehicle to your fleet, you need to pay attention. Some makes that might be cheaper to insure versus others based on their 5-star safety ratings issued by ANCAP, are Toyota, Mazda and Nissan.
History:
The risk factor of a specific vehicle is an important point to consider when choosing a new commercial vehicle for your fleet. If history shows a model has a high record of involvement in accidents, it can raise insurance costs. For this reason, some vehicles are more expensive to insure than others.
Record Of Being Stolen:
Like driving risk, some business vehicles tend to get stolen more than others. They can include work Utes and four wheel drives that criminals have found easy ways to break into.
Further certain trucks that have not had security upgrades and can be low hanging fruit for a sophisticated truck thief. According to one survey, the least likely trucks to be stolen are Daewoos, Nissan and Dishatsus. It’s smart to have Small truck insurance for work trucks.
Steel Vs Aluminium:
Vehicles made of steel are less costly to repair than those with aluminium body parts, and if your vehicle costs less to repair, the insurance premium tends to be lower. Some popular Aussie made cars like Toyota, Ford and Holden can also get lower premiums as their parts are easily available.
Which Vehicles Are Expensive To Insure?
Horse Power:
Vehicles with increased horsepower can raise your insurance cost. This is because history shows that some of these vehicles tend to end up in bigger accidents, with expensive repairs costs, more frequently.
Availability:
If you own rare or unique vehicles in your fleet, it will often increase the cost as it is not easy to find the replacement parts.
Fuel:
Some diesel cars are expensive to repair, raising their premiums.
Other Things That Impact The Insurance Rate Of A New Car
Market Value:
If your business vehicle is insured at market value, then the sum you get, if your vehicle was written off, is determined by its market value at the time of the damage. Alternatively, with agreed value, the value is determined and agreed upon at renewal.
Driving Record:
The driving record of drivers also plays an important role in determining the insurance cost vehicles. If drivers have a clean driving record with little to no accidents, premiums tend to be lower.
Deductibles:
How much will you pay out of pocket while making a claim?
In the language of insurance, this amount is known as the deductible. If you agree to pay a higher deductible, or more money out of your pocket, you may be able to lower your premium.
Bottom Line:
Adding a new vehicle to your fleet can impact your insurance premium and average cost per vehicle. The change in premium often depends on the cost, mileage, make, safety ratings. It is smart to talk to your insurance broker, who can advise you what to expect in relation to insurance premiums, prior to making your new vehicle purchase.
What do you think? Let us know by commenting below!
Disclaimer:
*Important: Cover may be available subject to meeting insurers underwriting criteria. Some of the covers listed may or may not be available or may have limitations or exclusions. Cover inclusions vary significantly from insurer to insurer. DO NOT rely upon the above. Check your policy schedule carefully for inclusions and exclusions and limitations. Talk to a business insurance broker for more information.
Author Bio:
Romit Malhotra is the brand representative of Smart Business Insurance, a leading Australian insurance broker. A big foodie, he loves to travel the world. Also, a diligent businessman, Romit likes to pen down his thoughts on related topics whenever he finds some free time.