Many factors influence the rate of car insurance that's given to an individual or business. An individual's age, driving history, location, make and model of vehicle, and the purpose of the vehicle can all affect the insurance costs. Though these have been the standard factors for decades, as the world adapts to new ways of operating, the insurance industry is seeking ways to keep up with modernized operations.
This is where telematics comes into play. Telematics are high-tech devices that are able to track and monitor vehicles' movements and habits. While traditional insurance bases insurance solely on external factors, telematics-based programs aim to decrease or increase costs based on the actual risk of the specific driver/vehicle. This is revolutionary in creating fair insurance programs, where good drivers are rewarded and poor drivers are analyzed accurately against their risk. The data collected in telematics will change the future of insurance to accurately reflect the assets insured and instill additional layers of protection.
How Do Telematics Work in the Insurance Industry?
Telematics devices are highly intelligent computer-like devices that connect to a vehicle using GPS or other data collecting tools. The most prevalent asset tracking used in the modern fleet analysis is GPS, but these devices can also track when the vehicle stops, its speed, mileage, dashcam footage, fuel use, and maintenance reporting.
When an individual or business enrolls in a telematics insurance program, their telematics device will communicate through a cellular network and upload data on a recurring basis via cloud software. This information will then be analyzed by the insurance specialist who will make cost adjustments accordingly. The access to all these data points ensures insurance programs are reflective of the most up-to-date risk analysis and makes irrelevant factors obsolete.
These data points, though helpful to all auto insurance holders, can be of extra service to fleet management. Large fleets will have a wide variety of drivers that can be challenging to maintain. These data points can pinpoint the behaviors of each driver, ensure they are following the directed routes, and are driving according to road laws. This results in rewards for good drivers and transparency of drivers that come with a higher risk. This transparency ideally has the potential to reduce accidents and fleet auto claims.
What are the benefits of Telematics?
There are various benefits to telematics aside from just being able to track vehicles. All of the data collected through telematics can be used to efficiently create a well-rounded risk management and protection program. Some of the benefits include:
Ensure Accurate Driving Routes
The GPS aspect of telematic devices can track the location and route of every vehicle connected to the device. This increases the accuracy of driving routes, regardless of the business, as drivers will be aware their locations are being tracked. Additionally, these devices allow for an “invisible boundary” that will trigger a notification if a vehicle is to go beyond the permitted locations. The result is a decrease in personal milage on company time, and the ability to quickly identify potential risk vehicles before any damage is done.
Decrease Theft Claims
Fleet’s are no stranger to insurance claims. Between accidents, manufacturing issues, and theft-it can be quite the cost for companies who manage a fleet. Telematics devices can decrease the prevalence of all these risks. The tracking and GPS aspects of the devices are hooked up to not only the vehicle but the items inside the vehicle as well. In the event of theft, these items can be tracked down and quickly recovered.
Decrease Emergency Maintenance
Telematics can track the habits of the vehicle and provide updates for general maintenance needs. The data collected allows for these devices to alert drivers when there’s a potential issue with the vehicle. The technology uses vehicle diagnostics to schedule preventive maintenance and avoid emergency breakdown costs, delivery delays, or vehicles not up to code.
Improve Quality of Service
Transparency is crucial to customer service in 2022! Customers who engage with delivery-related products want to be able to track their purchases through the entire stage of purchase and delivery. Telematics can provide real-time updates on both the purchase and the delivery vehicle so customers are always aware of their order’s status. This feature ensures open communication with customers, builds trust, and accuracy in the delivery process.
The Future Is Telematics
Most major auto insurance companies have introduced telematics-based programs for fleets looking to improve their risk analysis. In time, these devices will likely become the standard for passenger drivers as well. Advancement in technology has allowed businesses and individuals to focus on accuracy and precision. Insurers are no longer forced to guess what the risk is, instead they are able to pull a full report and analyze real-time data. Telematics is still considered “up and coming” and modern, but soon it will be the norm. As companies continue to understand the benefit of data and tracking, insured’s will experience insurance programs
Insurance With ECBM
Curious to learn more about your options for auto and trucking insurance? ECBM’s experts keep up to date with the latest industry trends, giving you access to the best possible insurance programs. Our brokers and consultants can analyze your current policies and make any necessary adjustments. If you don’t have a policy and are looking to get coverage, our team can help you from start to finish. For more information on our services, contact one of our agents today.