Running a business can be one of the most rewarding—and expensive—things you’ll ever do. From taking out loans and bootstrapping the first few months, to finally seeing the fruits of your efforts, there are few things that require you to pour out so much of yourself—and your bank account. That’s why saving every penny you can is so crucial to the health of your business—and your own stress levels.
One easy way to save some coin? Cut the amount you spend on commercial auto insurance for your business’s vehicles. Service vans, box trucks, pickup trucks, and towing vehicles cost a lot to maintain and insure, but there are many ways to reduce your overhead for these vehicles—including saving on insurance. Here’s how.
It’s important to know what you need your commercial auto insurance policy to cover from a legal and compliance standpoint. Then you can look at ways to reduce those coverage costs. Requirements vary by state, but in most cases, your commercial auto insurance policy will cover the following areas to some extent:
If your business uses vehicles, you’ll want to make sure you have the protection you need for the health, safety, and wellbeing of your drivers—and your bottom line.
When it comes to auto insurance, if your business owns the vehicle, you better get a commercial auto insurance policy—not a personal one. Because commercial vehicles are generally out and about more frequently than personal vehicles, commercial policies have higher coverage limits to match the increased risk that comes with spending more time on the road. While personal auto insurance policies cost less, they only cover claims related to personal use—not work-related tasks.
Commercial auto insurance also accounts for different vehicle types and uses that aren’t covered under personal policies, including:
Whether you own a fleet of delivery vans or operate a few pickup trucks with trailers for your landscaping business, the right commercial auto insurance policy will give you the assurance and protection your business needs to hit the road and get to work without worry.
While you definitely don’t want to skimp on coverage, you do want to get the best value for your money. Here are five of the best cost-saving tips we’ve found.
Selecting a higher deductible on your policy can save you money on a monthly or yearly basis, but don’t forget to check your balance sheets—you’ll want to make sure you can afford to pay more out of pocket in the event of an accident.
Some insurance providers provide significant discounts—up to 15% off—when you pay your entire annual premium upfront. If you can afford it in the short term, the long term savings could be big!
Depending on the provider, you may be able to save on your commercial auto insurance premium by paying with Electronic Funds Transfer. This means the money is drawn directly from your checking account each time your bill comes due, saving you on those pesky processing fees that sometimes come with check or credit card payments. Automated payments also save you time, and because you won’t have to worry about making manual payments, you can permanently cross that item off your to-do list.
If your business operates on a mostly seasonal schedule, you may want to consider signing up for seasonal insurance. This can save you money in the short term, because you’re not paying to insure vehicles that sit in storage for part of the year. But you’ll want to check with your insurance agent first, because you could end up cancelling out the short term savings by paying more in the long term.
This tip may come as a surprise, but we promise we saved the best for last. GPS isn’t just for getting from point A to point B—it’s actually the most valuable business tool in your toolbox, and it even saves you money on commercial auto insurance! When you add your team members to your commercial auto insurance policy, their individual driving records impact how much you pay for your premiums. But because GPS can help improve driver safety, many insurance carriers incentivize businesses to use it by offering discounts.
A GPS tracking solution can show you data on a variety of driver behaviors, including:
When you install GPS trackers in your business’s vehicles, you not only get data that will help your business run smoother on a daily basis—you also get a log of crucial information to help you save money on your insurance for those vehicles and the drivers you employ.
This data can help your drivers operate your business’s vehicles more safely, which is a gigantic asset in the eyes of any insurance provider. Let’s say you have an employee or two with a less-than-perfect driving record. That could translate to higher insurance costs for your business. But if you have a GPS tracking system that helps you identify what your drivers are doing with your company vehicles—like whether they’re speeding or driving dangerously—insurance carriers may be more willing to give you a break. And armed with this GPS data, you can coach employees on improving certain behaviors—potentially saving you even more money when your policy comes up for renewal.
By installing GPS trackers in your business vehicles, you can also manage the mileage you put on each vehicle. A robust GPS tracking solution will come with software that helps you interpret your tracking data and take action based on those insights. By viewing your fleet’s historic location data, you can optimize routes to reduce mileage. You can even set up custom alerts that let you know when a particular vehicle has reached a set mileage threshold, and then rotate vehicles to even out wear and tear. Monitoring mileage per vehicle with a GPS tracker also helps you make sure you’re being charged appropriately for how much your vehicles are actually on the road.
Last but not least, a GPS tracking system can assist with vehicle recovery in the event of theft. If that happens—hopefully not!—having a GPS tracking device on your vehicle will make it way easier for the police to track down its location, recover the vehicle, and hopefully catch the bad guys. And nothing saves you money on vehicle expenses more than not having to purchase a new vehicle!
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While you can’t duck insurance costs entirely, there are lots of ways to reduce the amount you spend on your commercial auto coverage. If you’re interested in all the ways a GPS tracking solution can not only put money back in your pocket, but also give you the data you need to make smarter decisions across your business, our team of experts would love to get in touch with you. Contact us to learn more.