One of the areas where the modern limo business needs to look into cutting costs is insurance.
Insurance costs can quickly raise overall operating costs, but a few changes and tweaks can help lower that expense and make insurance more affordable. When you are ensuring a fleet of vehicles, this is a valuable change to make.
Keep Tabs on Claims
Automotive insurance providers will typically lower insurance rates if a customer does not make many claims over the course of a year. However, this may not happen automatically. Chron.com recommends that you meet with your insurance agent once per year to review the number and types of claims that your fleet has had. If you do not have many, or any at all, you may be able to request a discount for your fleet. If you notice a trend in problems with your fleet or your drivers, you can make changes to avoid these problems and position yourself for a reduced claim down the road.
Use Fleet Tracking
Fleet tracking can earn you a significant discount, depending on your insurance provider, with nothing other than having the system installed. Insurance providers understand that fleets utilizing GPS tracking technology are less of a risk. There are two reasons for this:
First, GPS tracking makes it easier to recover any stolen limos. Unfortunately, commercial vehicles are not on the top of the list for most law enforcement officials, so your insurance company will most likely be left holding the bill if your vehicle is stolen. If you have GPS tracking, you can report the last known whereabouts, making it easier for law enforcement officials and increasing the chances of recovery.
Not only is it easier to get stolen assets back, but second, you also have more driver accountability, and drivers tend to drive more safely when they know their activities are monitored and reported. Limiting unsafe driving practices, like speeding or braking suddenly, can make your drivers and your vehicles less of a risk. If you can show safe driving practices using your fleet tracking technology, you may be able to request a discount. Performing a GPS audit of your drivers’ behavior can earn you a significant drop in your insurance rates.
Ensure Proper Driver Training and Qualifications
A bad driver can boost your insurance rates quickly, and put your customers at risk as well. Perform a thorough background check on any drivers you hire, and ensure that the drivers have a clear driving record. Being able to report this to the insurance provider may earn you a discounted rate as well.
Having experienced drivers can also help. As you are making hiring decisions, look not just at driving records, but also at commercial driving experience. Progressive, for instance, offers a discount of up to 20 percent for experienced CDL drivers on commercial fleets.
Pay in Full Each Year
Commercial vehicle insurance can be a large expense, but whenever possible, try to budget so you can pay it in full each year. Most insurance providers give a paid-in-full discount to companies that will pay once a year rather than entering into a monthly payment plan.
Discount for Commercial Business Experience
If your limo service has been around for a while, with at least three years of experience, ask your insurance provider if it offers a commercial business experience discount. Unique to commercial auto insurance policies, this discount rewards companies that have been in business for several years, as insurance providers have realized this means the company represents a lower risk. Your past success is a prediction of future success, and you therefore have the potential to be a long-term policyholder. To ensure they get your business, insurance providers may offer a discount, according to DMV.org.
Going without insurance for your limo fleet is not only irresponsible, but it is also illegal in most areas. If you are finding the costs are a bit higher than you like, consider if you are taking advantage of all of these money-saving options. Sometimes, all it takes to get a discount is a small change, and those discounts can add up significantly. //LD
Robert J. Hall is president of Track Your Truck,
a leader in GPS vehicle tracking systems
and software for small and midsized companies.