What Data Insurance Companies Are Using to Assess Your Insurance Cost

May 24, 2021

Fleet insurance can be a high cost for any fleet business. As a result, all companies are looking for ways to save money on driver insurance premiums. Many insurers offer discounts for various safety features and technologies, but what precisely do they look at to determine a business’s premium? Naturally, they evaluate how much risk that fleet poses. There are many ways that insurers determine a fleet company’s risk. This article will break down some of those ways.

Driving Records

Similar to the way personal car insurance works, insurers look at the driving records of everyone authorized to operate a vehicle. Naturally, drivers with many violations will result in a higher premium for the fleet because they are more likely to be involved in an accident. Accidents mean big payouts for the insurance company, and of course, they want to avoid that. Driver insurance companies will often check drivers’ work history, particularly in heavy-duty vehicles. Therefore, the best way for a fleet company to lower its rates is to hire experienced, safe drivers and continually coach all fleet drivers to maintain safe driving habits

Vehicle Value

A more expensive vehicle will incur a higher premium. This is simply the nature of insurance. Vehicles with more advanced features and more expensive parts will cost more to repair if damaged or replace if stolen or totaled. Insurance companies will naturally charge more for the risk. Every vehicle is different, so fleet managers should be sure to consider what the annual insurance costs will be when buying a vehicle. Some vehicles may wind up being too expensive once they factor in insurance costs. However, many newer features also increase safety, such as advanced driver-assistance systems (ADAS). These systems can sometimes result in discounts, so it’s always important to check with the insurance company before dismissing a vehicle based on its new, expensive features.

Vehicle Use

Many insurance companies charge insurance premiums based on how many miles a vehicle travels. After all, the more time a vehicle spends on the road, the more likely it is to get into an accident. For this reason, vehicles that travel more miles are susceptible to higher insurance premiums. Unfortunately, fleet managers or drivers often cannot do much about how far their vehicle travels unless they hire more drivers and purchase more vehicles. However, insurance companies consider it a significant factor when deciding on premiums for a fleet company. 

Safety Features

Many safety features can result in insurance discounts for fleets. Dash cams, telematics, driver rewards, and other safety measures show insurance companies when fleets prioritize safety. As a result, insurers sometimes offer discounts just for having these features in place. If not, fleets can harness these features to gather real data that shows their fleet’s pattern of safety on the road and show the insurance company that they are low risk. In most cases, these methods will reduce a fleet’s insurance premium. 

Location

As much as it matters how drivers drive and how much they drive, it also matters where they drive.  To insurance companies, high traffic areas look very different from desolate roads because busy streets are far more likely to cause an accident. Insurance companies break down different states and regions, rate them based on their risk level, and charge fleets based on that risk. For this reason, a safety feature like route planning may benefit the fleet company. Route planning makes routes safer by avoiding hazards like traffic, construction, and left turns and can show insurance companies that a fleet is safe even in an area that is considered high-risk. 

Claim Histories

Of course, when deciding on a fleet’s insurance premium, an insurance company will look at that fleet’s history. This review includes the safety of their drivers and any past claims processed. Fleets who have more claims on their records are more of a risk than those with fewer. These higher costs are why safety features like dash cams and telematics are so beneficial to fleets. Having these safety features not only prevents accidents in the first place, but when an accident does happen, these technologies often exonerate the driver of any blame and save both the fleet company and the insurer a major payout. 

Conclusion

Insurance can be complicated for fleets to understand, but it doesn’t have to be. By reading this article and researching how to lower your premiums, you are already taking steps to save your fleet thousands of dollars. 
Azuga offers technologies such as dash cams and fleet management software that can help you keep your fleet safe and your insurance costs low. Reach out to an expert at Azuga to find out how to get started saving today!

Explore fleet tracking blog posts by category.

Safety

Accountability

Efficiency

Reporting

Rewards

What Data Insurance Companies Are Using to Assess Your Insurance Cost

May 24, 2021

Fleet insurance can be a high cost for any fleet business. As a result, all companies are looking for ways to save money on driver insurance premiums. Many insurers offer discounts for various safety features and technologies, but what precisely do they look at to determine a business’s premium? Naturally, they evaluate how much risk that fleet poses. There are many ways that insurers determine a fleet company’s risk. This article will break down some of those ways.

Driving Records

Similar to the way personal car insurance works, insurers look at the driving records of everyone authorized to operate a vehicle. Naturally, drivers with many violations will result in a higher premium for the fleet because they are more likely to be involved in an accident. Accidents mean big payouts for the insurance company, and of course, they want to avoid that. Driver insurance companies will often check drivers’ work history, particularly in heavy-duty vehicles. Therefore, the best way for a fleet company to lower its rates is to hire experienced, safe drivers and continually coach all fleet drivers to maintain safe driving habits

Vehicle Value

A more expensive vehicle will incur a higher premium. This is simply the nature of insurance. Vehicles with more advanced features and more expensive parts will cost more to repair if damaged or replace if stolen or totaled. Insurance companies will naturally charge more for the risk. Every vehicle is different, so fleet managers should be sure to consider what the annual insurance costs will be when buying a vehicle. Some vehicles may wind up being too expensive once they factor in insurance costs. However, many newer features also increase safety, such as advanced driver-assistance systems (ADAS). These systems can sometimes result in discounts, so it’s always important to check with the insurance company before dismissing a vehicle based on its new, expensive features.

Vehicle Use

Many insurance companies charge insurance premiums based on how many miles a vehicle travels. After all, the more time a vehicle spends on the road, the more likely it is to get into an accident. For this reason, vehicles that travel more miles are susceptible to higher insurance premiums. Unfortunately, fleet managers or drivers often cannot do much about how far their vehicle travels unless they hire more drivers and purchase more vehicles. However, insurance companies consider it a significant factor when deciding on premiums for a fleet company. 

Safety Features

Many safety features can result in insurance discounts for fleets. Dash cams, telematics, driver rewards, and other safety measures show insurance companies when fleets prioritize safety. As a result, insurers sometimes offer discounts just for having these features in place. If not, fleets can harness these features to gather real data that shows their fleet’s pattern of safety on the road and show the insurance company that they are low risk. In most cases, these methods will reduce a fleet’s insurance premium. 

Location

As much as it matters how drivers drive and how much they drive, it also matters where they drive.  To insurance companies, high traffic areas look very different from desolate roads because busy streets are far more likely to cause an accident. Insurance companies break down different states and regions, rate them based on their risk level, and charge fleets based on that risk. For this reason, a safety feature like route planning may benefit the fleet company. Route planning makes routes safer by avoiding hazards like traffic, construction, and left turns and can show insurance companies that a fleet is safe even in an area that is considered high-risk. 

Claim Histories

Of course, when deciding on a fleet’s insurance premium, an insurance company will look at that fleet’s history. This review includes the safety of their drivers and any past claims processed. Fleets who have more claims on their records are more of a risk than those with fewer. These higher costs are why safety features like dash cams and telematics are so beneficial to fleets. Having these safety features not only prevents accidents in the first place, but when an accident does happen, these technologies often exonerate the driver of any blame and save both the fleet company and the insurer a major payout. 

Conclusion

Insurance can be complicated for fleets to understand, but it doesn’t have to be. By reading this article and researching how to lower your premiums, you are already taking steps to save your fleet thousands of dollars. 
Azuga offers technologies such as dash cams and fleet management software that can help you keep your fleet safe and your insurance costs low. Reach out to an expert at Azuga to find out how to get started saving today!

Take a look at related posts.