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ToggleVehicle telematics insurance helps price policies as per driving patterns and get discounts on premiums. Read what telematics insurance is, how it works & increases operational efficiency.
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Fleet businesses take insurance cover for the fleet to protect their operating vehicles or assets from risks. It safeguards against financial losses due to accidents, theft, or any unforeseen events.
A decade back, vehicle telematics insurance was a niche concept. But today, it’s not an alien concept anymore. It’s elevating the fleet businesses and insurance industry in parallel. Today safe driving is not just a personal goal but also has a financial incentive.
Fleet operating businesses that value time, vehicles, drivers, and consignments equally, for them telematics insurance is an added advantage. The term has forced businesses to focus on operating activities more than ever.
📚 Key Takeaway
If you have recently discovered the potential of telematics insurance, here’ everything unfolded around it — you will read:
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Telematics insurance is also known as pay-as-you-drive usage-based insurance or pay-per-mile insurance. This type of insurance offers you a discount on your vehicle telematics insurance based on how safely the vehicle is driven or has travelled fewer miles than average each year.
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Here are the steps on how telematics insurance works in fleet management:
Telematics devices such as GPS trackers and sensors are installed in fleet vehicles to monitor vehicle usage and driving patterns.
The GPS devices start collecting accurate data on:
The vehicular data collected by telematics devices is presented in neat, visually appealing, and more structured data. It even quantifies concerning events for better oversight and pricing of the policies by insurers. It presents:
Insurers analyze the real-time data generated from the telematics system to assess the intensity of driving risks more accurately. Just so they can provide more tailored premiums after analyzing actual driving behavior.
Traditional vehicle telematics insurance is not priced on how well you drive the vehicle. With the augment of telematics-based insurance programs, the policies are priced on the basis of driving habits. Fleet operators get good discounts for having good driving behaviour on the road. In short, the better your fleet is driven, the more you can save.
Here’s everything your business experiences in the long run if you incentivize on a telematics-based insurance policy.
When you opt for telematics-based insurance, upon enrolling in the program, most insurance providers offer a 5-10% discount. During the first month of the policy period, the company starts collecting your vehicle’s driving pattern. Most programs require you to install telematics devices, dashcams, and software to continue reaping beneficial discounts.
Here are some of the best ways to get good discounts:
💡Maintain mileage less than average. 💡Restrict harsh braking, accelerating, and cornering events (that can put pressure on your engine). 💡Prevent your fleet from driving in rush hours or on congested routes, where pressure on the engine is evident. |
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To make policies more accessible, the auto insurers divided the insurance in the following ways:
Pay as you drive is a comprehensive insurance plan that allows drivers to customize the policy based on their requirements. Simply put, fleet owners who drive vehicles more ought to pay more, and vice versa.
PHYD is an auto insurance plan where the fleet driver’s behavior and trip history data are used to define the premium money. Drivers with good driving scores and behavioural patterns can get low-cost vehicle insurance from the top provider in the market.
The distance-based insurance is calculated based on the total miles your fleet travels during the insurance period. Here an average of the miles driven and the number of years/ months you owned the vehicle are considered to calculate the premium.
Control your drive insurance (CYD) is just like the above three vehicle insurance plans, CYD lets operators define the premium price based on their driving patterns, miles, and overall requirements.
Ask any small-scale to biggest logistics and supply chain business, they would tell you how badly they wish that their fleet is:
To bring all these points to reality, fleet managers are readily adopting vehicle telematics software technology. The proven technology is helping them kill two birds with one scone.
a) Number 1 – They can watch over their drivers’ behaviour and take note of risky driving patterns.
b) Number 2 – They can utilise the technology to win back the best-discounted premium plans for the fleet insurance plans.
Intrigued by the advantages of telematics-based insurance? Want to harness vehicle telematics technology first? TrackoBit offers you an advanced vehicle telematics solution range that provides with which you can enjoy maximum fleet visibility, get driving data events, and use it to enjoy discounted premiums.
Telematics insurance also known as usage-based insurance lets telematics insurance providers define premium calculations as per vehicle or fleet operator driving habits. Through this, premium providers adjust rates by monitoring driving mileage and habits through the use of vehicle telematics software technology.
Telematics or usage-based insurance helps insurers reduce their risks of providing policies by assessing fleet vehicle driving profiles as per their - Covered mileage - Average speed - Usage rate - Events of collision, harsh acceleration, and braking Such real-time data analysis aids in the investigation of claims by insurers and aids in detecting fraud claims.
Fleet vehicle telematics insurance allows you to enjoy lower premiums based on overall driving behavior. Plus, it promotes real-time feedback to improve driving skills and the safety of the fleet and driver.
Nandita, a digital content lead at TrackoBit, leverages 8+ years of expertise in crafting compelling B2B and B2C content. She specializes in delivering well-researched, solution-focused strategies and writeups for SaaS products in telematics, geospatial tracking, AI, and IoT. When she’s not strategizing, writing, or leading her team, you’ll likely find her diving into new reads, exploring trending topics, or hitting the gym.
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