Telematics Insurance Simplified

Jared Davidson, Commercial Insurance Agent at Beehive Insurance If you’ve heard of the word, you likely work in the fleet management industry—or maybe you’re a tech junkie(!). What does telematics have to do with insurance you might be asking? Telematics is a relatively new field in technology that combines telecommunications and informatics – the study of information processing. GPS is a form of telematics. A Vehicle early warning system, such as GM’s OnStar, is another. To compare GPS to today’s telematics would be like comparing an analog cell phone from 25 years ago to today’s versatile smart phones. Businesses that operate fleets of vehicles today are under constant pressure to reduce costs and increase efficiency through improved fuel economy, better driver behavior, more effective dispatching and tracking, and overall vehicle management. The FMCSA in conjunction with the USDOT has enacted regulations and guidelines that reflect their push to improve overall road safety through better monitoring of driver behavior and vehicle road worthiness. Today’s cutting edge telematics devices integrate vehicle data obtained from the vehicle’s on-board diagnostics devices, which since 1996 are on all vehicles under 12,000 lbs GVW, with GPS data as well as driver inputs such as braking and acceleration levels to monitor overall vehicle operation. Telematics devices are becoming less proprietary over time so the cost of entry is becoming lower. The newest systems are cloud based and work on all major brand smart phones and tablet devices. Windows and/or Apple based operating systems are used at the dispatching end and Android (and other) operating systems on the driver’s end. Telematics systems can (and should) include real-time dispatching, routes traveled, and locations traveled to. There are applications that factor in traffic and weather data to route the vehicle to the most efficient way to reach its destination. This can result in savings through fewer miles traveled, lost time in traffic, and decreased idle time. Many hand held devices can now be configured to only allow incoming calls from numbers chosen by the employer, with similar restrictions on out-bound communications, reducing distractions to a minimum. Driver logs and post-trip inspections can also be performed with some of the better telematics software, reducing costs related to employees’ time to perform these government mandated duties, with the input automatically uploaded to the company’s server for real-time record keeping. So again, what does this have to do with my insurance? Well, several insurance companies have completed studies indicating that businesses that utilize telematics have fewer claims on their commercial auto policies. Lower claims for a business owner means that their account becomes more attractive to a potential insurer, and are more likely to get their best price on a quote. Some large commercial auto insurance companies are giving discounts for permanently attached telematics devices as well. Additional benefits can include time, money, and attention saved not having to deal with claims. Like deductibles, vehicle rental, repair shop issues, purchasing a replacement vehicle, possible negative publicity, and expenses related to training employees in new vehicle operation. Additionally, drivers have been shown to have fewer moving violations and accidents when they understand their vehicle and driving habits are being monitored. Quick location and recovery of stolen vehicles is much more likely. Even when the vehicle is not in use, the tracking device will ‘ping’ its location every few minutes. Weekend and holiday vehicle use can be monitored and better controlled by the business owner, lowering miles traveled, fuel expense, and unnecessary vehicle wear and tear costs. All of this adds up to a more efficient, well run vehicle fleet – and makes the roads safer for all of us. Jared Davidson Senior Account Executive 801-743-7717 | jadavidson@beehiveinsurance.com