How Does Telematics Reduce Insurance Premiums

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Telematics is an integral part of fleet operations. It combines telecommunications, vehicle technology, and computer science to allow vehicles to communicate with operational software systems. Fleet managers can track what is going on with their vehicles in real-time using fleet management software and telematics. Vehicle telematics can track many details about a vehicle, such as its engine status, speed, location, fuel efficiency, HoS, maintenance requirements, and more. Fleets that combine telematics with dash cams and other safety features can learn even more about their vehicles. Many insurance companies see the benefits of telematics and therefore offer insurance discounts to fleets that utilize telematics properly. How can businesses harness telematics to take advantage of these insurance discounts? 

Telematics Improves Safety

Safety is a top priority for any fleet, and insurers like to see that. Fleet managers who combine telematics with dash cams can certainly see insurance discounts. Together, dash cams and telematics can detect signs of drowsy or distracted driving and alert the driver so they can correct their errors. If the driver continues to have difficulty, the system then alerts the fleet manager to take corrective action. It is crucial to ensure that fleets resolve these issues, as distracted and drowsy drivers cause thousands of fatal accidents every year. These alerts reduce that risk significantly, making fleets less of a liability to the insurance companies. 

Telematics alone can pick up on speed, rapid acceleration, and excessive lane changes. Behaviors like these can be signs of aggressive driving that fleet managers want to keep an eye on as well. Insurance companies will offer discounts knowing that fleet managers watch drivers for these behaviors and keep them and their vehicles safe on the road. 

Telematics Prevents Breakdowns

Breakdowns are a massive hassle, especially for fleets. They put an enormous dent in productivity, not to mention the cost of making repairs. Luckily, telematics can help prevent breakdowns by updating fleet managers on the status of vehicles. Keeping managers up to date on engine status, battery charge levels, and other details makes it much easier to prevent breakdowns before they occur. Furthermore, with fleet management software and telematics, fleet managers can set up automatic alerts when it’s time for a vehicle’s scheduled maintenance. These alerts are beneficial, as keeping track of so many vehicles is a time-consuming and tedious task. Insurance companies don’t want vehicles to malfunction or break down either, as this can cost them money. These savings are why they offer discounts for companies that employ telematics. It’s good for both the insurance company and the fleet business!

Telematics Proves Compliance

Insurance companies want to see that their drivers are compliant with the law. Being compliant with regulations is essential for DOT inspections as well. Telematics can help with this by showing drivers obeying the speed limit and other state driving laws. It helps drivers keep their records clean, and insurance companies feel secure in trusting that drivers are following the laws. Telematics can prove when drivers are obeying rules, and this is an excellent help to fleet companies. 

Telematics Exonerates Drivers

No matter how safe drivers are, accidents are inevitable when fleets spend so much time on the road. 70% of accidents are not fleet drivers’ fault, and telematics can prove it! By showing a driver’s speed, when they brake, and their distance, telematics can paint a picture of what happens at the scene of an accident. A dash cam can add even more detail to the picture. This image can help exonerate drivers of fault if there is ever a question after an accident. Being exonerated would save both the fleet company and the insurance provider thousands of dollars, so it is a significant benefit. These savings are why insurers offer a discount to fleets who employ telematics — because it saves them money in the long run. 

Telematics Tracks Vehicles

One of the most valuable features of telematics in the day-to-day life of a fleet operator is fleet tracking. This function helps keep track of what drivers are doing during the day and ensures everyone is on task. A benefit that insurance companies see is the ability to recover stolen vehicles. When a thief takes a vehicle, the fleet manager can tell police exactly where to find it. This feature increases the chances of recovering the vehicle quickly and in good shape, saving the insurer money in having to replace it. 


Most modern fleets are taking advantage of telematics. This technology is beneficial not only for insurance discounts but in the day-to-day operations of the fleet. As technology advances, more uses become available. Azuga is the leader in fleet management technology and can provide state-of-the-art solutions to your fleet business needs. Reach out to an Azuga expert today to get started.