Haven’t you always wanted to get fairer insurance premiums for your fleet vehicles? Overpaying for insurance coverage is one of the most disappointing things in the business, especially when you know that you’ve done everything possible to push down the risk factor and secure your fleet against all extrinsic and intrinsic threats. If only there were a way to pay for your insurance coverage based on how well your team performs. Luckily, there is. Telematics insurance lets you do precisely that and thus has been aptly dubbed as usage-based insurance since you only pay based on how much you use your fleet. There are two major approaches to this: either the insurance company will use your telematics data to assess the level of use or the attention towards vehicular safety.
Either way, your investment in telematics and your dedication towards building a safer business protocol will be rewarded in the form of lower premium rates and other perks. Read on to find out what is telematics insurance and how you can get the most out of it.
Here are eight facts about usage-based insurance:
Rates Are Tailored Specifically For You
The first and most important differentiating factor for telematics insurance is that the insurance costs will vary for everyone – they do so usually as well. Still, in this case, the rates will be tailored specifically
for you. Based on the risk assessment of your business, made possible by the telematics data, the insurer will offer you an insurance premium rate best suited to your situation.
Conventional insurance calculations factor in several aspects of your business, some of which are beyond your area of control. These aspects include the general risk levels in your service areas, and of course, you’re powerless to change anything here. But with telematics insurance, you can prove to your insurer that you are doing all you can to lower the risk for your business.
This will let you bring down the premium rates.
Pay-Per-Mile Option
Of the two options you have in telematics insurance, the first is the pay-per-mile option which works well for those who drive less and thus want to pay less. This may not work out for most fleet businesses, but if you’re not primarily a transportation company and have a fleet of vehicles for getting to places to deliver your services, then it may work out. It all depends on how much you travel. There is a base rate and a per-mile rate here, you’ll only have to pay the former if you stay under the mileage limit agreed upon, and extra charges will be applicable on top of this based on how much you exceed the said limit.
Behavior-Based Insurance
The second option is more up the alley of fleet businesses. It involves sending telematics data to your insurer to show them how much you’re serious about maintaining safety for your fleet. Based on your performance, the insurer will offer you a custom rate.
This option is better suited for fleet businesses that operate in a high-risk service area or have had trouble in the past. By constantly informing your insurer about your exemplary behavior, you’ll be able to get affordable premium rates for your business.
Are Several Telematics Options
The telematics system itself will count. You have a ton of different products available, and your insurer’s requirements will be a factor for you. Some insurers prefer to have trackers installed in all of your cars to
track the driving behavior of your drivers and more. Besides locational updates, telematics systems also give information about idling, maintenance trouble, driver behavior, and more. Overall, the system will be a perfect addition to your fleet in more than one way.
Performance Discounts
You can also get discounts from your insurer if you show decent performance; this usually happens after a set timeframe. This period may be as short as 90 days or as long as six months. The discount rates vary, and usually, insurance companies advertise these rates, so be on the lookout for any opportunities to secure a sizeable discount for your business.
These performance discounts may be permanent in some cases! The advertised rates may be as high as 25-50 percent but make sure, beforehand, that the company is fair in its assessment before you sign up
for insurance with them.
Provided By The Telematics Software
If you’re worried about your privacy and wondering what sort of data is collected by telematics systems, then here are the most important highlights:
- Current location data
- Location history
- Average speed, distance, time spent on the road, etc.
- Driver behavior
- Maintenance alerts
- Idling notifications
And so on, plus, you can also get footage if you choose to have dash cams installed, and that will probably land you a more significant discount.
Usage Is Also A Factor
For some insurers, telephone usage during your on-road time will also be a factor in determining the final insurance cost for your fleet. This trend is not ubiquitous, but be sure you discuss the rules in this regard beforehand so that you’re not troubled about your premium rates later on.
But it would be best if you cut phone usage behind the wheel altogether.
Get A Fair Premium Even If You Have A Troubled Past
The best part about telematics insurance is that besides getting personalized insurance rates based on your usage, you can also secure fair deals for your business even if you’ve had trouble in the past. Telematics insurance is ideal for companies with a troubled history of accidents but has taken solid steps to mitigate the risks. Plus, your low credit score won’t be trouble either.
Bottom Line
Telematics is a fairer option for fleet owners, especially if they have had some troubles in the past. If you can show the insurer that you’ve taken all the necessary steps to lower the risks and to make your fleet safer, you will surely get some concessions in your premium. Hopefully, you now know all you need to about usage-based insurance and how it can help your business!
