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Fleet

A group of vehicles, ships or aircraft that are insured together under one policy. Sometimes these are subject to different rating approaches from those that would apply to individual risks.

Fleet insurance

Policy on a number of vehicles operated by the same insured and rated on an experience basis, i.e. fleet rating. Usually five or more vehicles constitute a fleet. The fleet itself can comprise vehicles of different classes, e.g. private cars, goods-carrying vehicles, etc. Aircraft and ships can also be insured as fleets.
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(i) A Motor Insurance Policy covering a group of similar vehicles with premiums calculated on an experience basis. (ii) A Hull Insurance contract covering a group of vessels in a single Policy. A Reinsurer’s line will be based, usually on the top value Vessel and pro-rata on the other, or may be interested in vessels only above or below a certain category.

Fleet Rating

The process of determining premium rates for fleets. Different techniques will be used for the individual risks in a fleet, largely based on the size of the fleet and the amount of claims history available. For example, while small fleets may be largely rated according to book rates per vehicle with some adjustment for expense savings, some form of experience rating will be used for larger fleets with the credibility increasing with the size of the fleet. In Marine Hull Insurance, fleet rating will aim to incorporate the characteristics of a fleet (for example ones under common management) into the rating process, as well as the risk characteristics of the individual ship. Advanced statistical rating techniques could be applied although simpler rating techniques are used in practice.

Fleet rating (marine)

The underwriter and shipowner agree an insured value for each vessel in the fleet. The rate is based on ownership, past claims experience and other underwriting considerations. The leading underwriter, and those who follow, write a ‘line’ on the highest valued vessel on the slip and a pro rata line on all other vessels in the fleet. The subsidiary insurances on freight and disbursements are also on a fleet basis.

Fleet rating (motor)

Insurer compares average gross premium per vehicle with the claims cost per vehicle/year during the previous years. If the loss ratio is materially under a certain percentage, eg 60 per cent, the gross average premium may attract a fleet discount. If the loss ratio exceeds, say, 62.5 per cent, then the gross average premium will be increased. The discount or loading takes account of any trend and is applied to the insurer’s tabular rate for each vehicle in the fleet. For large fleets (premiums £100,000) rating is by burning cost or is restrospective, i.e. premiums will be based on known claims costs over a period after payment of an initial deposit premium. over

Flesch test

A method to determine the degree of ease or difficulty for reading material. It counts not only the number of words in a sentence, but also the number of syllables in each word. Some states require that insurance contracts be written so that they have a certain readability level (often, 8th grade).
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A method for determining the degree of ease or difficulty for reading material. This method counts not only the number of words in a sentence, but also the number of syllables in each word. It has come into popular because of recent introduction of insurance as a course of study requiring that contracts of insurance be easily understandable by someone at the eighth grade level.