Fleet insurance can protect businesses that rely on multiple vehicles, but no policy covers every situation. Understanding what fleet insurance does not cover can help you avoid unexpected costs and make sure your business has the right protection in place.
The exact exclusions vary between insurers and policies, so you should always check your policy wording. However, there are several common situations that businesses should be aware of.
What does fleet insurance not cover?
Fleet insurance can provide cover for multiple vehicles under one policy, but certain risks may be excluded or subject to specific conditions.
Common fleet insurance exclusions can include:
- Unauthorised use of a vehicle
- Drivers who do not meet the policy requirements
- Incorrect use of a vehicle
- Wear and tear
- Mechanical or electrical breakdown
- Damage caused deliberately
- Uninsured goods or equipment
- Certain types of business use
- Claims where policy conditions have not been met
Let’s look at some of these in more detail.
1. Unauthorised use of a vehicle
Your fleet insurance covers vehicles for the uses stated in your policy. If an employee uses a company vehicle for a purpose that your policy does not allow, your insurer may not cover the resulting claim.
For example, your policy might permit business use but restrict private use. If an employee uses the vehicle for an unauthorised personal journey, this could create problems if an accident occurs.
Business owners should make sure employees understand how they can use company vehicles.
2. Drivers who do not meet the policy requirements
Fleet policies can offer flexible options, including any driver fleet insurance, but this does not necessarily mean that absolutely anyone can drive your vehicles.
Your policy may include restrictions based on factors such as:
- Driver age
- Driving experience
- Licence requirements
- Driving history
- Convictions
- Previous claims
If you add a new driver to your fleet, check that they meet your insurer’s requirements before allowing them to drive.
3. Wear and tear
Insurance generally covers sudden and unexpected events rather than the normal deterioration of a vehicle.
For example, worn tyres, ageing components or gradual deterioration would not normally be treated as an insured event.
Businesses remain responsible for maintaining their vehicles in a safe and roadworthy condition.
Good fleet maintenance can also help reduce breakdowns, accidents and avoidable repair costs.
4. Mechanical or electrical breakdown
Standard fleet insurance does not necessarily cover mechanical or electrical breakdown.
For example, if an engine fails because of a mechanical fault, you should not assume that your fleet insurance will pay for the repairs.
Some insurers may offer additional breakdown assistance or other optional cover, but this varies between policies.
If your business relies heavily on its vehicles, consider whether breakdown assistance would be useful alongside your fleet insurance.
5. Deliberate damage
Insurance is designed to protect businesses against unforeseen events. It does not generally provide cover for damage deliberately caused by the policyholder or an authorised driver.
This is why businesses should have clear vehicle-use policies and procedures for employees.
6. Business activities outside your policy
One of the most important areas to check is how your vehicles are used.
A fleet insurance policy needs to reflect the activities your business carries out. If your vehicles start being used for a different purpose, tell your insurer or broker.
For example, a business that normally uses vans to transport its own tools and equipment may have different insurance requirements from a business that transports goods for customers.
Using a vehicle outside the agreed business use could affect a claim.
7. Personal belongings and equipment
Do not assume that everything inside a company vehicle automatically has cover under your fleet policy.
Your vehicle may be insured while tools, stock, equipment or personal belongings inside it require separate cover or specific extensions.
If your employees regularly carry expensive tools or equipment, check whether your fleet policy covers these items and whether any limits apply.
You may need separate tools insurance, goods-in-transit cover or another type of business insurance.
8. Uninsured or unroadworthy vehicles
Businesses have responsibilities beyond buying insurance.
Every vehicle used on public roads needs to meet the relevant legal requirements. Depending on the vehicle and its use, this can include having the appropriate MOT, road tax and a valid insurance policy.
You should also maintain vehicles properly and make sure drivers report defects.
Insurance does not replace your responsibility to operate safe, legal and roadworthy vehicles.
Can fleet insurance cover everything?
No. There is no single fleet insurance policy that automatically covers every business, vehicle, driver and risk.
Insurance Revolution explains that fleet policies can provide different levels of cover, including Third Party Only, Third Party, Fire & Theft and Comprehensive cover. The protection available depends on the policy you choose.
You may also be able to add optional covers or extensions depending on your insurer.
This is why it is important to compare policies based on the protection they provide, rather than looking at the premium alone.
How can you avoid gaps in fleet insurance cover?
The best way to reduce the risk of an uninsured claim is to keep your policy information accurate and review your cover when your business changes.
Tell your insurer or broker about:
- New vehicles
- New drivers
- Changes to vehicle use
- New business activities
- Changes to where vehicles are stored
- Changes to your operating area
- Changes in the type of goods or equipment you carry
You should also make sure your employees understand your vehicle-use rules.
Remember that policy exclusions vary between insurers. Always read your policy documents and ask your broker if you are unsure about what your fleet insurance covers.
Get Your Fleet Insurance Quote
Finding the right fleet insurance means looking beyond the headline price. The cheapest policy may not provide the level of cover your business needs.
At Insurance Revolution, we can help you find business fleet insurance for your vehicles and business requirements. We can arrange cover for different types of vehicles and offer options such as any driver policies, subject to insurer criteria.
Sources
- GOV.UK, Use of company pooled cars or vans: GOV.UK: Use of company pooled cars or vans
- GOV.UK, Company cars and fuel: GOV.UK: Expenses and benefits: company cars and fuel
