Usage-based insurance is growing in popularity due to how it personalizes insurance premiums. Insurers can customize premiums, usually based on how safe a driver is or how much they drive a vehicle. Insurance is a significant cost for fleets, so finding a discount is ideal. Insurers use telematics to gather data about vehicles and determine the deals they will give on premiums. What data do they track, and how do they use it?
What is Telematics?
First, it is important to know what exactly telematics is. Telematics is data gathered from your car that is then electronically reported to an external source. This external source is usually a fleet management system. In insurance telematics, it would be transmitted directly to the insurance company to provide discounts based on the information provided. In most circumstances, such as with Azuga’s telematics system, a driver simply plugs the hardware into their OBD port, and it starts sending information off to an easy-to-use fleet management software. This software shows data in real-time or gathers reports to display the data over time.
One of the most significant factors that insurance companies pay attention to is the distance a vehicle travels. They use this to determine rates in a Pay As You Drive (PAYD) or distance-based model for insurance. Cars that travel less distance are eligible for higher discounts than those that travel further.
Knowing how fast a driver is going helps determine how safely they drive. Driving at high or fluctuating speeds may indicate unsafe driving behaviors that an insurer may not want to cover and choose not to offer discounts. Telematics can tell both a fleet manager and an insurer what speed a driver is going in real-time and in reports over time so everyone can get a view of what is happening.
Everyone has to brake harshly occasionally. It is a part of safe driving. But repeated hard braking is an indicator of unsafe habits that can lead to higher insurance costs. It can reflect a driver who is not paying attention to the road, following too closely, or driving too fast. Hard braking is of particular interest to fleet trucks since trucks take much longer to stop than standard-sized vehicles.
Time of Day
A whopping 49% of all car accidents happen at night, even though only 25% of total traffic occurs after dark. Reduced visibility and an increase in drunk and drowsy drivers cause many of these accidents at night. This is why insurers want to track what time of day drivers are on the road. Daytime driving is much safer, and providers are more likely to provide discounts for it.
While a vehicle’s exact location isn’t always reported to insurers, the presence of a GPS tracking system can be. Telematics usually tracks GPS location. Forbes found that drivers with GPS tracking get into fewer accidents, meaning that these drivers are potentially eligible for discounts just for having GPS trackers. GPS makes drivers much safer fleet managers can track them and keep in touch if anything seems amiss.
If you’re operating a fleet, you most likely already have telematics on your vehicles. Azuga telematics works directly with auto insurers to provide the information they need to get you the best deals on auto insurance. It’s easy to install in 20 seconds, and our fleet management software is straightforward and detailed, so you can find the information you need at a glance. If you’re looking for a telematics solution to take advantage of these great insurance discounts, look no further than Azuga.