How Does Commercial Telematics Impact Your Fleet Insurance?

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Commercial vehicle usage-based insurance, also known as commercial telematics, is a system that uses a GPS device to transmit data directly from your business' vehicles to your insurance provider. This data pertains to your driving habits. If you own a business that uses multiple cars as part of its operation, you may want to consider getting fleet insurance rather than individually insuring each one of your vehicles.

Fleet insurance is basically a multi-vehicle insurance policy that can cover all of the different vehicles your business uses for commercial purposes. By condensing the coverage for all of your business' vehicles into just one policy, it can simplify things for you, especially when it comes time to renew.

If you use telematics in all of the vehicles that are covered under a fleet insurance policy for your business, you can save a significant amount of money. As the data on your drivers' habits are monitored, your insurance provider may use it to determine whether you may be issued a discount on your insurance premium rate, which may be anywhere from 5% to 25% depending on various factors.


What is fleet insurance and how does it work?

When you own a business that regularly uses multiple cars, vans, trucks, or any other kinds of vehicles, it is important to consider the auto insurance options that are available to ensure you get coverage that matches both the number of vehicles you have and the uses you have for them.

Although fleet insurance is generally best for companies that operate in either transportation or customer service, as long as your business has at least five vehicles registered under your company name, it can be considered a good option. Fleet insurance will allow you to easily track, manage, and renew the insurance for your fleet.

This type of policy also makes it easier for transferability to take place since any driver at your company is allowed to drive any vehicle covered by the policy.

Depending on the province that you're in, your fleet insurance policy may include various types of standard coverages. Most fleet insurance policies have bodily injury liability coverage, so you will be covered if someone gets into an accident with one of your commercial vehicles and causes bodily harm to someone in doing so.

Fleet insurance policies generally include property damage liability coverage, so if an employee gets into an accident and damages one of your vehicles, the cost of repairing or replacing it will be covered. Your fleet insurance policy may also come with combined single limit (CSL) coverage, which attaches the same dollar amount of coverage for any type of instance, whether it involves bodily injuries or property damage.

Uninsured automobile coverage may be included, which protects your drivers and any passengers in your vehicles in the event that they get into an accident with an at-fault driver who is either uninsured or underinsured.

Collision coverage may also be an optional addition if you would like to protect your company in the event that one of your employees is uninsured and gets into an accident.


How Commercial Telematics for Fleet Insurance Works

If you decide to enroll in a telematics program when signing up for a new insurance policy, you will be given a small wireless device that must be installed in your car's diagnostic port. This device will collect data to monitor real-time driving behaviours so that your insurance provider can get an accurate and objective idea of your driving habits.

Generally, the main factors that most insurance providers are focused on include the distance that you drive, the time of day that you drive, and when and how you accelerate and brake. If your insurance provider determines that you have good driving habits or they can see you are gradually improving your driving behaviour, they may grant you opportunities to save on your insurance premium by offering discounts ranging from 5% to 25%.

These savings can be taken advantage of when it comes to fleet insurance as well. If all of the vehicles in your fleet have telematics devices installed, you could spend a lot less on your policy each month.

The other added benefit of telematics is that it will hopefully encourage all of your drivers to drive more safely and cautiously. The development of such habits will be good for your business in the long run by helping to minimize the number of accidents that occur involving company vehicles.


How to Save Money on Your Fleet Insurance

Aside from taking advantage of a telematics program, there are a number of other ways that you can save money on your company's fleet insurance premium rate. One of the best ways to do that is by ensuring that your fleet drivers have excellent driving records so that you can access discounted premium rates. You may consider conducting regular driving license checks to make sure that your drivers have disclosed any convictions that they have on their record, as even small infractions can raise your rates significantly.

You can also drop your rates by increasing the deductible, which is the amount your company will have to pay before coverage kicks in in the event of an accident. As long as you are certain your company can afford to pay the deductible amount, increasing it could save you a significant amount. You may also be granted discounts if you purchase other types of insurance policies for your business through the same provider.

Additionally, you can usually reduce your rates by installing anti-theft and safety equipment in your fleet's vehicles. It may also be necessary to start encouraging your drivers to implement risk management practices since doing so can help you prevent accidents and minimize the number of claims that you file. You can achieve similar results by seeking ways to minimize the amount of time your drivers spend on the road, if possible.


How Telematics and Fleet Insurance Can Save Your Business Money

It is extremely important to have insurance coverage for any vehicles that are being used commercially by your business. That way, you can avoid any trouble in the event that one of these vehicles ever gets into an accident. However, it can be quite expensive and a hassle to individually insure each vehicle that is part of your operation, especially when you have many different vehicles.

Fortunately, fleet insurance could allow you to insure all of your business' vehicles under a singular policy, saving you time, effort, and money. You can also reduce your rates in various other ways, such as by ensuring that your company's drivers have clean records, increasing your deductible, installing anti-theft and safety equipment in your vehicles, and implementing risk management driving practices.

Of course, one of the best ways you can save is through telematics programs that reward good driving behaviour with significant premium discounts. If you implement all of these strategies, you will no longer need to worry about costly auto insurance, and your business can save a large amount in the long term. 



Jessica Coates is a blogger in Toronto. She graduated with honors from the University of British Columbia with a dual degree in Business Administration and Creative Writing. Jessica Coates is a community manager for small businesses across Canada. When not working, she leisurely studies economics, history, law and business solutions.

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