How Your Los Angeles Fleet Insurance Is (and Isn’t) Like Your Personal Auto Insurance Policy
As a Los Angeles-based business owner or manager, your job is basically to solve problems and create new streams of income. Your mindset may be that fleet insurance doesn’t seem like a problem in need of solving. After all, you’ve had coverage on a personal vehicle since you were a teenager. A commercial policy couldn’t be that much different, could it?
It’s pretty much the same thing in some regards. In others … it’s a big difference. Let’s start with the basics.
What Is Fleet Insurance?
The California Department of Motor Vehicles defines a commercial vehicle as one “which is used or maintained for the transportation of persons for hire, compensation, or profit, or designed, used, or maintained primarily for the transportation of property (for example, trucks and pickups).”
We’re pretty sure the DMV knows what it’s talking about, though it sounds like it took an army of lawyers and bureaucrats to come up with that definition (“persons for hire”?).
So we’ll simplify it a bit.
A commercial vehicle is basically anything with wheels that helps businesses do their business. Sure, that includes trucks and pickups, but also 18-wheelers, commercial and personal vehicles used for delivery or people transport, and even tractors, construction vehicles, errand-runners, and tow motors.
But What Constitutes a ‘Fleet’?
That question suggests one key difference between your personal and commercial policy. You might only have one personal vehicle under coverage, but you need at least two company vehicles before you can say you’ve got a fleet, at least in the eyes of some insurers.
Others might require at least four vehicles, but it’s never a matter of needing a parade of road-runners carrying packages, freight, or “persons” all across the nation to qualify for a commercial policy. Not even close.
What Are the Advantages of Fleet Insurance in California?
You know about dealing with volume, right? Of course, you do. As a business owner or operator, you make every effort to both buy and sell in volume.
As a buyer, you know you’ll pay less on a per-item basis. As a seller, you find it much more time- and cost-efficient to sell one buyer a dozen grommets rather than one grommet to each of a dozen buyers.
It’s the same with commercial insurance. Your agent would love to wrap up two (or 10 or 50) vehicles into one company policy and will offer you a good rate to do so.
Speaking of Which, How Much Does Fleet Insurance in Los Angeles Cost?
In California, it averages between $600 and $2,000. That’s a big spread, but as with all types of insurance, your price is based on specific factors, including the type of commercial vehicle. For example, a car used for business may cost as low as $600 annually, where a cargo van may cost from $3,000 to $6,000 annually.
Other factors include how much coverage you choose to carry, type of cargo (hazardous materials will cost more), type of industry, your driving history and more.
It’s still cheaper to find a commercial policy for all of your vehicles rather than insure them individually.
There are several other reasons that LA companies typically buy more than minimal coverage. Let’s break it down this way.
Your Brand Reputation Can’t Take a Hit
When your company is at fault for a collision and injuries, that’s your reputation on the line. Your goal is to fix the problem to the satisfaction of potential customers or the general public and retrieve your outstanding corporate image as soon as possible. That means having adequate coverage limits to make good on that goal.
Victims Can Be Lawsuit-Happy Against Businesses in Los Angeles
All companies have a gazillion dollars in the bank — right? At least that can be the perception of the owners of buildings bumped by your earthmovers or fenders bent by your teenage courier. The point is, you want to be adequately protected from lawyers who love to chase companies, even those with tiny fleets.
Reckless Driving Happens
If it seems your people don’t always treat your vehicles like their own — they don’t. They might be less careful on the brakes, horn, tires, and speed limits. That’s when bad things happen. On the same note, make sure you see the driver’s licenses and driving records of anyone who’ll spend time behind the wheel for your company. It’s critical to screen potential drivers before they drive one of your company vehicles.
Commercial Vehicles and LA’s Infamous Bumper-to-Bumper Traffic
You might have recognized a phenomenon known as “congestion” on the highways and byways of Los Angeles. Bumper-to-bumper means that bumpers can be easily bumped. And worse. Things don’t get a whole lot better when your work takes you or your employees to other notorious Golden State chokepoints. So make sure you have adequate commercial (and personal, for that matter) coverage.
Fleet Downtime in CA Is Not an Option
If it’s an important vehicle for your company (and aren’t they all?), there’s no putting off repairing or replacing a damaged company car since the next time you make a big sale might be today. You need it now. That’s a key reason you want collision and comprehensive coverage, not just liability, on your commercial policy — even if you can get by with minimal coverage on your personal auto policy.
Is Fleet Insurance Mandatory in California?
Yes, just like it is for any personal vehicle in the state. You must have at least minimal coverage for your commercial vehicle, which means liability. Same as your personal car policy requirements.
Liability covers the other guy, and other vehicles or property damaged or destroyed by your vehicle, but you pay for the damage or destruction of your own vehicle out of your own pocket. So if you only have liability, you’d better have deep corporate pockets.
Consult an Independent Commercial Insurance Agent
An independent agent works for multiple carriers, not just one. That means you can compare rates and conditions for several policies, not just the relatively scarce offerings from agents representing a single insurer.
You’ll also make a better deal with an experienced agent who can point out all the ways to whittle away at the cost through strategies such as tweaking your level of deductible and adjusting coverage limits.
Bottom line: Your business might have a fleet even if you’re not in the people or freight business. If you have wheels working for you, at least check out your situation with an independent commercial insurance agent. You might be surprised at how much you’ll save.
Find Affordable Fleet Insurance in Los Angeles Today
If your LA-based business is putting two or more vehicles to work in any way, get in touch with an independent commercial insurance agent at Cost-U-Less. Call us at (800) 390-4071 or get a quick quote online. You can also drop in to a Los Angeles Cost-U-Less Insurance office location near you.
