Fleet vs. Individually Rated Commercial Auto (IRCA) Insurance?
People often ask what’s the difference between fleet vs. individually rated commercial auto(IRCA) insurance? The simple answer is that there are 2 categories of insurance for vehicles registered in a company name:
2. Individually Rated Commercial Auto (IRCA)
Fleet Insurance Explained:
Fleet insurance is typically defined as any policy with 5 or more vehicles registered in a company name. Pricing for fleet insurance varies and is negotiated by the broker and underwriter on a fleet-by fleet basis based on a number of factors including the loss ratio, vehicle usage, geography, driver history, CVOR if applicable etc. Fleet policies can include a variety of types of vehicles ex. Private Passenger, Light & Heavy Commercial. Some fleet insurance policies may include a fleet insurance endorsement like the 21b in Ontario that helps reduce the administrative workload and potential for gaps due to timing, reporting or human error that can be associated with managing insurance for a fleet.
Individually Rated Commercial Auto (IRCA) Explained:
In contrast individually rated commercial auto(IRCA) insurance functions almost identically to personal lines auto policies where each vehicle is rated based on a rating matrix that is consistent and inflexible based on various risk factors. Individually rated commercial auto departments are separate from fleet insurance departments and some insurance companies will write fleet insurance, but choose not to write individually rated commercial auto insurance.
Another resource to help better understand the difference between fleet vs. individually rated commercial auto(IRCA) insurance is the Financial Services Commission of Ontario
To learn more about fleet or individually rated auto insurance for your business speak to an ALIGNED Insurance
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