Fleet insurance

Fleet insurance at a glance

Fleet insurance is a single policy that covers multiple business vehicles under one contract. It simplifies administration, provides consistent cover, and can be more cost-effective than insuring vehicles individually. In the UK, business vehicles carry significant exposure - there are more than 4.3 million company cars on the road, fleets account for nearly 60% of new registrations, and company cars typically clock around 18,000 miles a year. Higher mileage means more wear, more time on the road, and an increased chance of incidents.

Premiums have been under pressure. Many fleets saw costs rise by around 25% in 2023 as claims and repair bills increased. Modern vehicles need specialist parts and labour, and repair costs have climbed more than a third since 2020. Serious incidents can be expensive - the average motor claim is around £3,600, but injury claims can exceed six figures. One in three UK road accidents involves someone driving for work, which underlines the need for robust protection and responsible risk management.

Insurance can offer real financial protection, but only when you understand what is covered - and where the gaps are.

This guide explains how fleet insurance works, the cover types available, what affects the price, and practical steps to reduce risk. You will also find clear pointers on eligibility and claims. Our goal is to help you compare options confidently, set realistic expectations, and choose cover that genuinely fits how your vehicles are used.

What is covered - and how it works day to day

A typical fleet policy offers comprehensive, third party fire and theft, or third party only cover across cars, vans, HGVs, and specialist vehicles. Comprehensive usually includes damage to your vehicles, third party liabilities, fire, theft, and often windscreen cover. Employers’ and public liability are separate policies, though some brokers package them alongside fleet cover.

Policies can extend to named drivers, any authorised drivers, or specific driver age bands. Core inclusions often cover accidental damage, third party injury and property damage, and legal costs. Optional extras may include courtesy vehicles, breakdown, tools in transit, GAP cover, foreign use, and protected no-claims discounts. Electric vehicles may need agreed repair networks due to specialist parts and training, and repairs can be around 25% more costly than for petrol or diesel models.

Claims usually follow a straightforward process: report the incident promptly, provide driver and telematics data if available, obtain estimates from approved repairers, and work with your insurer on liability and settlement. There will be an excess per claim and potentially higher excesses for young or inexperienced drivers.

Limitations matter. Wear and tear, mechanical failure, and unauthorised use are commonly excluded. If a driver was unlicensed, under the influence, or using a vehicle outside declared business use, claims may be declined. Hired-in and hired-out vehicles, and trailers, often need explicit declaration. Being upfront about vehicle use, drivers, and security measures helps avoid cover gaps.

Who benefits most - and when it may be unnecessary

Fleet insurance is well suited to businesses running three or more vehicles, whether cars for sales teams, vans for service engineers, or HGVs for logistics. High-mileage fleets, seasonal peaks, and multi-site operations gain from centralised management, consistent terms, and one renewal date. Organisations employing a mix of permanent and temporary drivers also benefit from a policy structure that can reflect varied driver experience.

Where the fleet includes newer, technology-rich vehicles or an increasing share of EVs, comprehensive cover with approved repair networks can help control downtime and repair quality. Telematics and driver coaching are increasingly valuable - fleets using them have reduced collisions and claims, which can lead to better terms from insurers.

If you run one or two vehicles with low annual mileage, individual motor policies might be simpler. Equally, if vehicles are rarely used for business travel, review whether pool car access, short-term hire, or mileage reimbursement could be more economical.

Choose your level of protection

1. Third party only

   • Covers your legal liability for third party injury and property damage.
   • No cover for your own vehicle damage or theft.
   • Suitable only where vehicle value is low and risk appetite is high.

2. Third party, fire and theft

   • Adds cover if your vehicles are stolen or damaged by fire.
   • Still excludes accidental damage to your vehicles.
   • A middle-ground option for older vehicles with moderate risk.

3. Comprehensive

   • Includes accidental damage to your vehicles, third party liabilities, fire, and theft.
   • Often covers windscreens and approved repairer benefits.
   • Most common choice for mixed fleets and higher-value assets.

4. Named driver vs any driver

   • Named driver policies suit stable teams with known drivers.
   • Any driver offers flexibility - often higher premiums and age limits apply.

5. Optional add-ons

   • Courtesy vehicle or hire replacement - helps manage downtime after a claim.
   • Breakdown cover - UK and European options for roadside recovery.
   • Tools, goods, and equipment - protects items carried for work.
   • GAP cover - bridges the difference between market value and finance outstanding.
   • Foreign travel and green cards - essential for cross-border operations.
   • Protected no-claims discount - maintains discounts after specified claims.

Pick the minimum cover that safely reflects your risk - not just the lowest price.

What it costs - and why prices move

Premium trends matter. After sharp increases in 2023, the market has shown mixed movements. Motor fleet premiums rose again by around 8% in early 2025, with mid-2025 seeing moderate quarterly increases of roughly 2.5% to 7.5% depending on risk and insurer competition. More than a quarter of UK fleets expect annual premium rises exceeding £10,000, driven by repair inflation, credit hire, and theft severity. Total repair costs reached about £7.7 billion in 2024, reflecting costly parts and labour.

Can you apply - and what insurers ask for

Most UK businesses with vehicles used for work can apply, including limited companies, partnerships, charities, and sole traders. Insurers will ask for your Motor Insurance Database details, vehicle schedules, driver lists, licence checks, claims experience, and how vehicles are used and stored. Telematics data, driver training records, and maintenance schedules can help demonstrate control of risk.

Common restrictions include minimum driver age bands, licence type for HGVs, and limits on convicted drivers. Businesses may be declined if there is a history of non-disclosure, uninsured driving, repeated high-value losses, poor vehicle maintenance, or inadequate security. If vehicles carry hazardous goods or operate internationally, specialist cover and compliance evidence will be required.

Being transparent about driver experience, temporary labour, and subcontractor use is essential. Where drivers change frequently, consider processes for licence checks, induction training, and in-cab coaching to satisfy underwriters.

Getting covered - simple steps

1. Gather vehicle, driver, mileage, and claims data - make it accurate and current.
2. Decide cover level, driver basis, and realistic excess aligned to cashflow.
3. Share risk controls - telematics, training, security, and maintenance schedules.
4. Obtain comparable quotes from multiple insurers or a specialist broker.
5. Review endorsements, exclusions, repair networks, and credit hire terms carefully.
6. Bind cover, update the Motor Insurance Database, and brief drivers on procedures.
7. Monitor incidents, coach drivers, and review telematics insights each month.
8. At renewal, validate data, re-market if needed, and adjust cover to usage.

The good and the cautions

Safer driving and better data are the most reliable ways to control cost.

Before you commit - check the small but vital details

Review the policy schedule for excesses per vehicle type, windscreen terms, and any higher excesses for young or new drivers. Confirm cover limits for third party property damage, personal injury, and uninsured loss recovery. Check exclusions for wear and tear, undeclared use, driver age restrictions, and unapproved modifications. Understand how repair networks, credit hire, and courtesy vehicles operate, especially for EVs. Ask how no-claims discounts and mid-term changes affect price. At renewal, compare like-for-like terms, as rates can move even if your profile stays the same. Keep licences, maintenance records, and telematics evidence ready - this can support favourable pricing and smoother claims.

Related options to consider

1. Employer’s liability insurance - protects against employee injury claims arising from work.
2. Public liability insurance - covers third party injury or property damage not tied to driving.
3. Goods in transit insurance - protects items you transport for customers.
4. Breakdown and roadside assistance - minimises downtime and disruption.
5. Hired-in vehicle insurance - when you rent or lease vehicles short term.
6. GAP insurance - covers the difference between market value and finance outstanding.

Frequently asked questions

Q: How many vehicles do I need for fleet insurance? A: Many insurers start at three vehicles, but some offer mini-fleet for fewer. If you have one or two vehicles, individual motor policies may be simpler and cost-effective.

Q: Are temporary or agency drivers covered? A: Yes, if your policy allows any authorised driver or specific age bands. Expect higher excesses and premiums. Keep licence checks, induction training, and telematics oversight to satisfy underwriters.

Q: Do telematics really reduce premiums? A: Telematics and driver coaching can cut collisions and claims. Insurers often reward proven improvements with better terms at renewal, though results vary by driving behaviour and fleet size.

Q: Why are premiums still rising? A: Claims inflation continues, with higher repair costs, complex vehicle technology, theft severity, and credit hire pushing prices up. Market competition helps, but risk profile and claims history dominate pricing.

Q: Are EVs more expensive to insure? A: Often, yes. EV repairs can cost around 25% more due to specialist parts and labour. Using approved repairers and driver training on EV safety can help control downtime and costs.

Q: What if my driver has an accident while off the clock? A: Cover depends on declared use. If social and commuting use is excluded and the trip was private, your fleet policy may not respond. Clarify permitted use for each vehicle and driver.

Q: How can I reduce claims? A: Focus on driver selection, regular training, speed compliance, vehicle maintenance, and telematics-led coaching. Clear incident reporting and near-miss reviews also help prevent repeat events.

What to do next

Take stock of your vehicles, drivers, mileage, and recent incidents. Decide the minimum safe level of cover, then compare policies on identical terms. Share your risk controls and telematics data to secure competitive quotes. Move at your pace - clarity first, then cost.

Important note

This guide provides general information, not personal financial advice. Policy terms vary by insurer. Always read the schedule and wording carefully, confirm inclusions and exclusions, and seek professional advice if you are unsure.