Fleet vs Non Fleet Commercial Vehicles

Jun 10, 2020 | Business Insurance

Do you know the difference between a vehicle classified as a fleet and a non-fleet commercial vehicle? What are the corresponding insurance coverages for each type? 

We’ll rephrase that question. Did you know that the difference in your vehicle policy can potentially save you money? It can also be the determining factor in whether or not you can legally use a vehicle in your fleet!

When it comes to managing a fleet of vehicles, the policy and legislation you classify vehicles under are important. But commercial auto policies can be a complex thing to navigate. This goes especially for fleet managers who operate in several different states.

That’s why we’ve written this post to detail the difference between fleet vehicle and non-fleet vehicle policy.

If you go through this article thoroughly, you can avoid any hassle of legislation in the future.

Save time and money with a commercial insurance quote from Team AIS!

What Is Fleet Insurance Coverage?

First things first, what in the world is fleet insurance coverage when it comes to commercial vehicles? Say you own more than one company vehicle. Instead of insuring each work vehicle individually, your company may save thousands by getting fleet insurance. Fleet insurance can cover all of a fleet’s automobiles.

Fleet Vehicle, Non-Fleet Vehicle, and Commercial Vehicle

It is a legal offense to operate vehicles without valid insurance in almost every state. That’s why we need to know what the vehicles you own technically are.

These can be non-fleet vehicles. But to avoid confusion, allow us to explain these three types further.

Fleet Vehicle

A fleet vehicle must be by a business or an organization. This is the only main requirement of a fleet vehicle; the business owns all the vehicles in the fleet, not an individual. They do not need to be a specific size. They don’t have to have a specific purpose.

Non-Fleet Vehicle

A non-fleet vehicle is a vehicle that isn’t a part of a fleet. Vehicle ownership usually is usually under an individual but can also be under a business.

If a fleet vehicle is registered as a non-fleet vehicle the fleet manager can lose out when it comes to rates. We’ll explain this further below.

Commercial Vehicle

A commercial vehicle is defined as any vehicle used for commercial purposes. This typically refers to either the transport of goods or the transport of people. In this respect, many commercial vehicles are also fleet vehicles, whilst some can be non-fleet.

What differentiates a fleet vehicle from a commercial non-fleet vehicle is the number of commercial vehicles. Usually, if a business owns 5 or more commercial vehicles, they have a fleet. These vehicles should all then be classified as fleet vehicles, rather than non-fleet vehicles.

However, it can sometimes be preferable to self-insure each vehicle individually, rather than as a fleet, if you own less than 20 vehicles. It can, therefore, be very difficult to figure out when to adopt a fleet policy for your vehicles.

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When Do I Classify Vehicles as Fleet or Non-Fleet?

This depends on the vehicle in question, as well as how many other vehicles you own.

For example, trailers, because they are not self-driving, don’t count on your list of vehicles. But if you own 5 or more of these self-driving vehicles, you are able to classify your trailers as fleet vehicles.

This is why it’s essential to contact the right insurance provider to know what your vehicles need. Knowing what policies your vehicles could be entitled to before you decide what is best for your business.

You can either insure all of your vehicles under one policy (as a fleet). Or you can insure them individually (as non-fleet vehicles). 

What Is the Difference Between a Fleet and a Non-Fleet Auto Policy?

When obtaining fleet insurance, a variety of factors will be considered by your insurer. One advantage can be that all of your vehicles are covered under one policy. This also means you will only have a single renewal date for your insurance. Rather than having to keep track of every single vehicle you own.

Fleet insurance can be tailored to a specific fleet. This means you could have insurance for a fleet of taxis, a fleet of trucks, or a combination of different vehicles.

Fleet insurance can usually make it easier to assign drivers to your vehicles. When each vehicle is insured individually, you will often need to contact your insurance provider to register a driver to a vehicle.

For larger companies, negotiating the right fleet insurance can ensure vehicles are covered while also often saving money.

But, for smaller fleet managers, starting out with a non-fleet (commercial) auto policy might be preferable. This method often means individually rating each vehicle, similar to when individuals take out RV insurance.

This means that the option needs to be properly considered depending on what vehicles are owned by the business. When it comes to individual ratings, vehicle legislation costs will differ state-to-state.

Factors such as vehicle age, vehicle size, and mileage will also need to be considered. Often, a specific driver will need to be registered to a vehicle to legally drive it when the vehicle is commercially insured. 

This can work for a taxi company where each driver has their own car. It would work less so for a distribution provider where a fleet of vehicles could be manned by different drivers at any time.

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Commercial Fleet Insurance Cost

Annual mileage, vehicle age, number of fleet vehicles, and  where you’re driving the vehicle all affect fleet insurance rates. Larger fleets have lower insurance prices. The average monthly fleet insurance costs $83 to $125. Cars and vans cost $1,000 per year, whereas trucks cost $1,500. Just to be very clear, these prices are estimations, not exact figures. Before making any decisions, you can shoot us an email at info@teamais.net or fill out this Fleet Auto Quote Form so we can guide you.

What Do I Do If I Need Help With Fleet or Non-Fleet Insurance?

If you’re not sure which of these options is best for your company, Advantage Insurance Solutions can help.

We have a lot of experience in providing insurance to businesses in a variety of sectors. That includes auto dealers and commercial auto insurance. We know everything your fleet vehicles need coverage for, and the best price to be able to do so.

Want to know how to lower fleet insurance costs? Check this article on How to Keep Fleet Insurance Costs Down

What if I need higher limits for a contract?

Need more insurance for your fleet of vehicles? Get a commercial auto insurance quote now and see how much you can save. We will help you navigate the world of commercial auto insurance. Our Commercial Insurance Advisors can answer any questions you may have. 

Call or text us at  (877) 658-2472 today!

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