Could Weekend Insurance Adjustments Save Your Business Money?
Have you ever thought about adjusting your commercial auto insurance on a weekly basis? It may sound unconventional, but it could lead to significant savings for your business.
I currently insure five vehicles for my company, and the annual premium totals an eye-watering $23,500. That breaks down to around $64 a day. The kicker? We rarely use these vehicles on the weekends, meaning we’re essentially shelling out money for insurance when they’re just parked.
During off-peak months, we simplify our coverage to the bare essentials, which slashes our premium down to approximately $700 annually, or just $2 per day. We keep only comprehensive coverage since the vehicles are stationary. This seasonal strategy saves us about $3,700 over two months.
So, why not take it a step further? What if we contacted our insurance provider, Progressive, every Friday to drop our coverage to minimum levels, then reverted to full coverage on Monday mornings? Two short phone calls each week could save us an astounding $6,600 over the year—equivalent to $64 saved per call. We frequently adjust our policy without any significant hassle, so it doesn’t seem like a heavy lift.
Considerations
Potential Downsides:
– Progressive reports liability coverage changes to the state; although this hasn’t caused us any complications so far.
– The process can be inconvenient.
– Frequent adjustments might affect our relationship with Progressive.
– There might be risks associated with being underinsured for any unexpected scenarios.
Potential Upsides:
– An impressive annual savings of $6,600.
– The phone calls aren’t too demanding.
Has anyone out there tried a similar strategy? Especially if you manage a larger fleet, this seems like a rather sensible approach. Am I overlooking something crucial? Let’s discuss!
2 Comments
Your strategy to potentially save on commercial auto insurance is an interesting one, and it raises some valid points about coverage needs and costs. Here are some perspectives, practical advice, and considerations you might not have thought of:
Understanding Insurance Policies
Flexibility of Policy Adjustments: Depending on your insurance provider’s policies, making frequent adjustments to your coverage may or may not be allowed without incurring additional fees. While you’ve noted that changes to your policy during the offseason are manageable, check with Progressive to clarify if they allow weekend adjustments without penalty, as some companies might have restrictions in place.
State Regulations: You mentioned that Progressive reports the lack of liability coverage to the state. It’s worth digging deeper into local laws regarding insurance requirements for commercial vehicles. Some states mandate that commercial vehicles maintain liability coverage at all times, regardless of whether they’re actively on the road. Failing to comply with these regulations could result in fines or legal complications for your business.
Risk Management Considerations
Risk of Uninsured Exposure: During the weekends when you drop your liability coverage, any incident involving your vehicles could leave you exposed. For instance, if someone were to break into one of the vehicles or if a tree fell on them while parked, the lack of liability coverage could lead to significant financial loss. Furthermore, if an employee were to use a vehicle on the weekend (even informally), your business could face serious liability issues.
Insured vs. Underinsured: Dropping to comprehensive coverage eliminates liability risks but doesn’t cover any potential accidents caused by drivers using your vehicles without coverage. Maintaining a minimum liability coverage, even over the weekends, could provide peace of mind against unexpected events.
Practical Recommendations
Explore Usage-Based Insurance: Some insurers now offer pay-per-mile or usage-based insurance products. If your vehicles are indeed idle most weekends, this could lead to substantial savings without the need to manipulate your coverage regularly. Check if Progressive or other providers in your area offer such plans.
Consider a Commercial Fleet Policy: If you haven’t already, look into commercial fleet insurance policies. These are designed specifically for businesses with multiple vehicles and may provide better coverage at a lower rate than insuring each vehicle individually.
Annual Policy Review: Beyond just the offseason adjustments, consider conducting an annual review of your insurance needs. Discuss your typical usage patterns with your agent and see if there are any customizable options or discounts available based on your business profile.
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Conclusion
While the potential savings from your proposed method are certainly compelling, it’s crucial to evaluate all the risks and restrictions that come along with it. By seeking clarity from your insurer and exploring new insurance products specifically designed for fleet vehicles, you might find a more efficient and less risky way to manage your insurance costs.
This is an intriguing approach to managing insurance costs, and it’s great to see businesses exploring innovative strategies to save money. Your idea of adjusting coverage based on vehicle usage is definitely worth discussing further. However, I’d like to offer a couple of additional considerations that might help you refine your strategy.
First, while the potential savings are significant, it’s vital to ensure that the process of frequent adjustments does not inadvertently lead to gaps in coverage. You mentioned a concern about being underinsured; unforeseen incidents can happen even during weekends when the vehicles are parked. It might be beneficial to consider a more permanent reduction in coverage during off-peak times if you consistently find that the vehicles are not in use, rather than toggling between full and minimal coverage weekly.
Additionally, have you looked into usage-based insurance options? Some insurers offer pay-per-mile or pay-how-you-drive plans that could potentially align better with your actual usage patterns. These could save you money without the hassle of frequent adjustments.
Finally, consider discussing your approach with a licensed insurance broker who can provide insights tailored to your business’s specific needs. They might also know about any policies or companies that offer flexible coverage options that could alleviate the need for manual adjustments.
It’s always beneficial to share strategies among business owners to identify best practices. Your post raises an important discussion, and I’m sure many readers would enjoy sharing their experiences or alternative solutions!