Commercial car insurance poses unique challenges for both the insurance carrier and the business owner. Traditional means of determining premiums, such as the vehicle type or weight, are often inaccurate because they fail to account for the behavior of the people driving the vehicle. This meant that some companies have been forced to overpay for commercial vehicle insurance.
An innovative new technology offers a solution to this problem. Telematics technology monitors and evaluates how vehicles are actually driven. As seen below, the potential savings for businesses that implement this new technology can be significant.
How Telematics Technology Works
Telematics works by installing a “black box” into each vehicle in the company’s fleet. Information about driving behavior is recorded and then delivered to a remote server, where it is analyzed by the insurance company. Those businesses with safe drivers are rewarded with lower premiums. For example Travelers Insurance offers discounts of up to 15% for qualifying businesses that use telematics technology to monitor their commercial fleet. ha
The information provided by telematics is useful for accurately determining auto insurance premiums and can improve other aspects of fleet management. Many insurance companies make data available, such as fuel efficiency, driver’s behavior and the vehicle’s route. Companies that use telematics technology can cut costs by analyzing and improving the route driven and ensuring fuel costs are minimized. Businesses that have telematic technology installed save an average of 10% on their fuel costs, according to figures released by Mix Telematics.
Access to Real-Time Data Lowers the Number of Accidents
With many telematics systems, this data is available in real time to fleet managers. This enables them to reduce insurance costs by reducing risky behavior. For example, with NexTraq fleet tracking technology, fleet managers are notified as soon as drivers are speeding or driving in a way that is deemed overly aggressive. By being able to spot and remedy potentially dangerous driving situations as they occur, it is possible to reduce the incidence of accidents. The Samovar Drive project, which was one of the most comprehensive studies conducted on telematic devices, showed that vehicles monitored by the devices saw an average reduction in accidents of 28.1%
Finding the Right Plan for a Commercial Fleet
Telematics technology is a relatively new innovation, but it is rapidly being introduced at many major insurance carriers. The range of plans and the discounts available can differ significantly, so it is important for business owners to obtain expert advice about which plan might be most suitable for their commercial fleet. An independent insurance agent can offer plans from across a range of insurance carriers.
If you want to learn more about how you can save money on your Indianapolis commercial auto insurance while improving safety and fuel efficiency, call Bolander Ianni Insurance at 888-360-9150 for a free phone consultation.