Your top questions about usage-based Fleet insurance

Written by Benedict Harrison

Published on

We take a look at some of the most frequently asked questions about usage-based Fleet insurance.

Image of a fleet of cars

In light of the ongoing situation regarding COVID-19, many fleets have experienced a downturn in the usage of their vehicles over the past few months. In turn, this has posed challenges to traditional models of insurance, where fleet owners pay a fixed price for their cover.

Despite the fact that some insurers have returned part of the premium to policyholders, many fleet owners are looking for alternative ways of paying for their cover. Not only can usage-based policies offer a fairer price, but they can also enable companies to scale their business up or down to reflect any changes in demand.

It is not that usage-based policies are more suitable for our current situation in particular, but that they can offer a fairer premium which more accurately reflects the mileage covered by a fleet of vehicles.

In this post, we’ll take a look at some of the most common questions about usage-based Fleet insurance, covering how it works, how it differs from traditional insurance and how you can get started with your quote.

How does usage-based Fleet insurance work?

When you set up a usage-based Fleet insurance policy, you pay a premium that is determined by how much time or distance your drivers cover. Each month, you pay a fixed cost so that your vehicles are always covered. Then, depending on the usage of your vehicles, which we can base on time or distance, we calculate a flexible premium.

For more information, you can watch our simple video below.

No matter how much time your vehicles spend on the road, or how much distance they cover, you won’t pay any more than your agreed monthly cap.

How does Zego calculate the flexible premium?

We’re partnered with ABAX, a world-class telematics provider, to help you get flexible insurance that works for your fleet. With these devices installed in your vehicle, we can get the detailed insights we need to be able to offer you a fairer premium. We can also take away the need for manual mileage reporting each month, with automatic reports sent directly from ABAX to Zego.

Plus you can get access to a great range of benefits too, including:

  • Vehicle tracking
  • HMRC compliant mileage claims
  • Insights into driving behaviour
  • Effective fleet management

You can find out more about how you can benefit from our partnership with ABAX here.

How much money can fleets save with usage-based cover?

Because of how usage-based insurance works, your premium, as well as how much you could potentially save, depends on how much time your vehicles spend out on the road or how much distance they cover.

However, one of Zego’s Fleet insurance customers saw their monthly insurance cost reduced by almost 60% when their fleet operations were cut back due to the lockdown restrictions.

How does payment work?

At Zego, we’ve simplified insurance payments to help you get started with flexible Fleet insurance, with low upfront costs, monthly billing instead of annual and no admin fees.

Around the beginning of every month, we will send out 2 invoices to you. These cover:

  • Your flexible premium, based on your mileage or distance covered in the month that has just passed
  • Your fixed base premium in advance of the following month

You need to pay both of these invoices within 14 days of the invoice date or by the due date stated on the invoice. You can also pay all your invoices in one payment. We just ask you to send us an invoice remit so our finance team can allocate the funds to the correct invoice.

How can I get a quote?

To find out more information about Zego’s products and get started with your quote for usage-based fleet insurance, you can visit our Fleet insurance page.