What Does It Mean To Have A Non-Fleet Commercial Auto Policy?

Aug 3, 2020 | Business Insurance

What is Non-Fleet Commercial Auto Insurance Policy?

When you have automobiles for business use, there is no doubt that commercial auto insurance is a must. A commercial auto policy also has higher limits than a personal auto policy. An insurance type that covers different types of vehicles and takes care of more complicated legal issues. So in this article, we will discuss the meaning of non-fleet and fleet vehicles. Because If your business has more than one vehicle, it’s difficult to choose a fleet vs. a non-fleet policy. Choosing between the 

two is not a matter of selecting the most suitable and cost-effective for your business.

To find out how you can insure your fleet vehicles, or to learn more about maintaining a safe fleet of vehicles, check our this video.

Non-Fleet Meaning

As the name implies, a non-fleet commercial auto policy provides coverage for just one vehicle. An example is If you have two cars and pay for two separate policies. It would be best if you renewed them according to the date you bought the policies. And follow the limits and exclusions of each insurance policy.

Standard Business Auto Policy Inclusions

Collision Insurance

This covers any “collision” incident regardless of whether you hit someone else’s vehicle or someone else hits your vehicle. If your car rolls over, then you have damage coverage. In these cases, it does not matter who is at fault.

Comprehensive Insurance

If anything other than a collision causes damage to your vehicle, we will still cover the repair costs. This may be due to flooding, natural disasters, vandalism, theft, fire, or animal damage.

Liability Insurance

Nobody wants to cause an accident. Although, if you are at fault in one, liability insurance covers the medical expenses of all involved. If the other party decides to file a lawsuit against you, don’t worry, legal expenses will also be part of the coverage.

UM/UIM Umbrella Coverage

But what happens if the one at fault is the other party and they don’t have coverage? This is where the following type of insurance enters the picture.

Uninsured Motorist Coverage

Few understand why this coverage is crucial. 13% of US drivers don’t have insurance, which is 30 million people. You’re okay if someone else causes an accident and doesn’t have auto insurance. Your uninsured motorist policy covers hit-and-runs.

Underinsured Motorist Coverage

When the at-fault party has insurance, but the coverage isn’t enough, then this coverage protects you from unexpected bills.

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Additional Coverages

Customizing a business auto policy with additional coverages is a smart move for any business owner.

Roadside Assistance

This add-on helps because regular business auto policies do not cover flat tires or dead batteries. It would be terrible if your vehicle breaks down on a highway or your truck battery dies. Despite our best efforts, horrible things happen. Safer than sorry, right? Roadside support gives you peace of mind when automobile problems or flat tires occur.

Expanded Towing

Aside from towing, minor roadside repairs and jumpstarts are a part of this policy. These can come in handy, especially when constantly traveling long distances.

Rental Reimbursement

Not everyone is fortunate enough to be able to go on with life as usual after an accident. When you’re out on the road, you’re out there for a purpose, and an accident impedes you from completing your task. Suppose the accident is bad enough that your vehicle needs towing, and you need to rent a car. In that case, this coverage pays for car rentals up to the policy limit.

Medical Payments or Personal Injury Protection

This coverage will be very beneficial when your business requires transporting people. Medical payments or personal injury protection coverage is extended to the passengers in the vehicle at the time of the accident and covers their medical expenses.

Hired and Non-owned Liability

Businesses sometimes own and use only some vehicles in daily operations. In situations where you have an employee who uses his own car to transport clients, for example, from the head office to manufacturing sites, or you only lease the trucks you use for deliveries, this coverage protects your business and your employee in the event an accident occurs. Remember, personal auto insurance generally won’t cover accidents where the vehicle was being used for business purposes.

Hired Auto Physical Damage Coverage

Subject to a chosen deductible, this coverage helps a business shoulder costs due to physical damages (comprehensive and collision damages) to rented or leased vehicles being used for business purposes.

Auto Loan or Lease Coverage

Sometimes, an accident results in the total loss of a vehicle. Suppose this happens, and there is still an unpaid loan or lease amount. In that case, this coverage will help pay for the difference between the outstanding amount and the actual cash value of the vehicle.

New Vehicle Replacement Coverage

In the event of a total loss, your insurance provider will replace your vehicle with a new one or a car with comparable value. Gap coverage is also available for any amount owed that is more than your vehicle’s actual cash value.

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What Is a Commercial Fleet Insurance Policy, and How Does It Work?

A fleet insurance policy can cover all the vehicles owned by the company.

Also, any employee with a valid driver’s license would generally be allowed to drive any of the insured vehicles and will be covered if the employee gets in an accident or a crash.

A fleet, which is the group of automobiles in which a business has ownership, can consist of various vehicles— passenger cars, SUVs, motorhomes, vans, buses, trucks, and even trailers— and these can be covered in just one policy.

What Is the Minimum Number of Automobiles Required for Commercial Fleet Insurance?

The minimum number of automobiles required to be eligible for commercial fleet insurance varies depending on the insurance company. For some, the minimum is five or more. Still, some companies offer fleet coverage for businesses with at least two vehicles.

What Coverage Can Be Expected of a Commercial Fleet Insurance Policy?

Fleet insurance policies provide the same coverage available for non-fleet policies. This coverage is available for all the company’s vehicles and employees included in a policy.

What’s important to remember is to be very clear about all the inclusions and exclusions in the basic policies so that you can add necessary “endorsements” (add-ons/additional coverage).

Who Needs Fleet Insurance?

  • Any business that expects a high volume of vehicle rides would benefit from a fleet insurance policy.
  • Any company with no designated drivers and employees is expected to borrow or switch vehicles.

Here are a few examples:

  • Door-to-door sales
  • Delivery services
  • Cleaning services
  • Hotel shuttles
  • Construction companies
  • Taxi or bus companies
  • Moving companies
  • Car rental services

What Are the Advantages of Having Fleet Insurance Over Non-fleet Insurance?

  • Convenience. You only need one policy to cover all your vehicles. Adding or removing cars from the policy at any time of the year is easy. This means you only have to remember one policy date and renew only once a year, regardless of the number of times you purchase a vehicle to add to your fleet.
  • Discounted Prices. Insuring multiple vehicles under one policy is cheaper than insuring them individually.
  • Flexibility. The vehicles can have specific drivers assigned to them. The setup can be that anyone permitted to drive any car can switch or borrow any company vehicle without any claims issues should an accident occur. 

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Are Underwriting Variables the Same for Fleet vs. Non-fleet Insurance Policies?

Most factors that affect the pricing of non-fleet policies also affect the pricing of fleet policies. These would include claims history, how you will use the vehicles in the business, how old the cars are, and where they are driven and parked. Regarding trucks, for example, their route, the gross vehicle weight, and what you will use them for will matter.

However, because the terms and conditions of auto insurance may vary from policy to policy and from insurer to insurer, one of the things you’d need to clarify is whether the personal claims history of a driver’s auto insurance affects the premium rating–especially for non-fleet coverage.  

Impact of At-fault Crashes

A critical consideration is how at-fault accidents impact drivers and their policies. When a fleet driver is found at fault in a crash, the accident does not influence the driver’s policy or any non-fleet auto policy where they are listed as a driver. The collision only affects fleet insurance.

However, an at-fault crash where the driver is using a non-fleet vehicle could mean that the driver’s policy will be impacted–depending on state laws and regulations, which may differ from company to company.

This matters because when crashes affect the driver’s insurance, premium ratings for any future policy where they will be listed as a driver will be involved.


When a business opts for non-fleet auto insurance, the vehicle drivers must be listed in the policy. In contrast, a fleet policy allows any employee (with a valid driver’s license) to drive any of the company’s fleet vehicles.

Regarding claims, fleet commercial auto insurance enjoys a single limit, while non-fleet vehicles do not. What does this mean for business owners? Suppose ten cars are listed under one fleet insurance, and they share a limit of one million dollars. In that case, it doesn’t matter which vehicle gets in an accident or how much the claim would be because the limit is for a million, and it is shared by all ten cars. 

However, suppose a business has five vehicles and decides to go for non-fleet insurance with a limit of $200,000 or even $300,000 each. In that case, the company becomes liable for any claim amount over the individual limit.

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How to Keep Fleet Insurance Costs Down

Although fleet insurance can be expensive, it is generally more cost-effective than getting non-fleet coverage for multiple vehicles.

The important thing is to be aware of how to keep your fleet insurance costs down without sacrificing coverage. Remember that insurance is about risk management. The higher the risk, the higher the premium. The lower the risk and the more unlikely your fleet is at risk of getting into accidents or crashes, the lower your policy’s premium will be. Here are a few reminders:

Driver Qualifications and Training

Make sure you hire highly qualified drivers. This is where a strict hiring policy comes into the picture. Hiring drivers skilled enough to drive the type of vehicles you have and who you know are safe drivers is one of the most basic ways to keep your insurance costs down. Hire those who have at least three to five years of driving experience with a good record for the past three years in their MVR.

One of the factors that affect the premium of any insurance is the claims history. Having safe drivers in your team means a lower risk of your vehicles getting into crashes where your driver is at fault. Having safe drivers from the start also makes it easier for the company to train them.

Review Your Claims History

Review your claims history to identify any possible issues you can correct through additional training. Also, check for opportunities where anyone could have prevented an accident with technology/equipment. At the same time, checking to see if drivers are consistently accountable for the accidents can be retrained.

Use or Add Technology

Equipment such as GPS tracking and collision warning devices can help prevent accidents and will, therefore, help reduce fleet insurance costs. Installing cameras that provide evidence in the case of an accident could also help.


Make sure to prioritize fleet safety and security even when your company vehicles are off the road. Install alarms and keep them parked in secure locations–i.e., neighborhoods with low crime rates, well-lit parking locations, secure fences, and the like.

Hiring and Training

Maintain a continuous fleet training program to help drivers improve their skills and remind them of the importance of safe driving. Many insurance companies charge higher premiums when drivers belong to younger drivers because statistics show that a more significant percentage of accidents are because of younger drivers.

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Have Policies That Reinforce Safe Driving

Having policies (including OSHA guidelines) that show how vital safety is would also help–i.e., routine checks before using the vehicles, random drug tests, and random knowledge checks regarding traffic rules and safe driving practices.

Review Policies Regularly

Review your fleet insurance policy regularly to ensure your limits and coverages are the best suited for your needs. It is also essential to check what other companies offer for the same coverage–especially if your premium has gone up.

Raising Your Deductible

As with other types of insurance, raising the deductible will mean lower premiums in exchange for a higher out-of-pocket cost for the company should there be any need for a claim.

Consult an Independent Broker

Independent insurance agents or agencies always help when shopping around for insurance policies. They can help you find the policy that will best address your company’s needs, and you will have access to expert advice without any additional cost. They will also be in an excellent position to tell you which company could offer you the most significant discounts. Plus, you save a lot of time and energy.

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Every Fleet is Different

Each business can be very different, regardless of the industry. Aside from a car rental’s exposure being additional from a bus or construction company, all fleets are different. Other states may also have varying regulations. This is why we’ve discussed the meaning of non-fleet and fleet vehicles.

As such, it is always in the company’s best interest to consult a licensed auto fleet agent so that they can provide you with the best options for your company. Let our team get you covered!

Call or text Advantage Insurance Solutions at (877) 658-2472 today!

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