Every year, there are approximately 37,000 fatalities as a result of a car accident. About 2.35 million suffer from crash-related injuries or disabilities. About 17,250 car accidents happen every day according to the Brannon Law Firm. The costs to the American people for these accidents come to around $230.6 billion annually. This is exactly why we have auto insurance – to protect us against the exorbitant costs of accidents. Unfortunately, business auto insurance costs can be high. For fleet companies, the costs are even higher. Luckily, there are ways to reduce insurance costs with a GPS tracking device.
How does a car tracking device reduce costs for fleets? Take a look below, and apply these tips in your fleet management.
How Insurance Companies Calculate Rates
To reduce your costs, you have to know how insurance companies calculate rates. There are several factors used to calculate the rates for average drivers:
- Past driving record
- Gaps in insurance coverage
- Type of vehicle
- Annual mileage
- Driver demographics
They calculate fleet insurance costs the same way, but there are a few differences. Insurance companies use statistics to calculate the risk of insuring you. They’ll also calculate projected claims frequency against the rest of the industry.
Claims loss ratio is a factor particular to the individual, or the individual company. It’s calculated by insurance claims plus adjustments divided by total premiums paid. Other factors unique to fleets include:
- Your business name/address
- Your excess
- Renewal date
- Number of vehicles insured
As you can see, there are a number of factors that affect your insurance premiums. For fleets, those factors often result in higher costs. Luckily, there is a way to reduce them. Take a look below to discover the most effective way of reducing insurance costs.
How to Lower Insurance Premiums With a GPS Tracking Device
While the cheapest coverage isn’t always the best option, there are ways of paying less for car insurance. One of the most easily achieved reductions to your insurance is a GPS discount. Adding a GPS tracker to each of your fleet vehicles allows you to collect real-time data on your drivers. It also adds several layers of security to protect your drivers and your business.
Insurance companies are more willing to insure a vehicle with lower risk. Here’s what tracking devices can do for your fleet:
Vehicle Recovery Features of a Fleet Tracking Device
Recovery of stolen vehicles in the United States is fewer than 60%, according to Statista. GPS tracking devices allow you to see your vehicle's location at any time. This means that if it's stolen, police will be able to recover it quickly and easily.
In other words, a tracking device improves your odds of recovery exponentially. Insurance companies like this, and are more willing to provide a discount because of it.
Using a Real Time Vehicle Tracking System for Safety Training
Human error causes about 93 percent of accidents, according to the National Highway Traffic Safety Administration. The causes are often drowsiness, distraction, substance abuse, or aggressive driving. While you can’t control other drivers, you can monitor your own and train them accordingly. The real-time data that you collect from a vehicle tracking device will help you do that. This real-time data gives you insight into:
- Engine diagnostics
- Engine idle time/ running time
- Detours/routes taken
- Unauthorized usage
- Driver behavior
- Hard braking
- Fuel spend
- Maintenance issues
These telematics devices compile easy to read reports to help you make insightful adjustments. With this data, you’re able to build training regimes tailored to each driver. In doing so, you’ll lower your liability, reduce the risk of accidents, and decrease costs.
The best telematics solutions also offer driver incentive programs, to encourage better driving. With the data and the incentives, drivers know they are being watched, but feel encouraged. They are less likely to feel micromanaged, and more likely to feel safe and rewarded.
A vehicle that is improperly maintained costs more. You’ll pay more for gas, more in labor and parts for repairs, and more due to productivity losses. Your vehicles will struggle to reach their destinations either due to mechanical issues and breakdowns or inefficiency. They’re also more likely to cause an accident.
A GPS tracker doesn’t just monitor your drivers, it monitors the vehicle as well. You’ll receive continuous diagnostics on your vehicle and you’ll be alerted to issues. It will remind you of recurring maintenance as well, such as oil changes and tire rotations. Tracking your fleets maintenance will also win you points with the insurance companies. They’ll be more willing to give you discounts because a well-maintained vehicle is safer.
The GPS Discount
No matter which car insurance provider you choose, they'll almost always have available discounts. Most companies offer around 15% off premiums for tracking systems. This is because of their dedication to promoting good driving behavior in addition to saving them from payouts.
Certain insurance companies will even pay you to implement fleet tracking software. In some instances, they may even pay for the technology and implementation of the system. There are conditions, but it is worth talking with your insurance company about it.
Another Way To Reduce Your Auto Insurance Costs
Along with a GPS telematics system for your fleet, you may also want to consider dash cams. Dashboard cameras provide visual documentation of a driver's performance, traffic, or accidents.
This visual account is admissible in the case of a claim or lawsuit, as well. It could be the deciding factor in your case and free you from accusations of fault. Dashcams are also great protection against theft. No matter how you use them, dashcams are a great asset for limiting liability. Insurance companies take this into consideration as well.
Need Commercial Vehicle GPS Tracking?
Insurance is expensive, but it’s necessary to protect everyone on the road, as well as your business. You have a lot to lose. Protect your fleet with a business vehicle tracking system.