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.

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.

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