Road Tech at Work: Telematics Benefit Drivers, Employers, and Insurers
For decades, auto insurance rates have been based on estimates and histories. Teen drivers, considered the riskiest, have paid the highest premiums, while married drivers have paid lower premiums based on an expectation of safer performance behind the wheel.
But technology has begun to paint a much clearer, more accurate picture of driver behavior, along with better information on conditions impacting that behavior, like road conditions, night versus day driving, areas through which a vehicle travels, the vehicle’s overall roadworthiness, and other factors. All of this data combine to assign premium rates that more closely reflect the actual risk involved. As a result, everyone affected by auto insurance rates stands to benefit from this growing influence of telematics.
Benefits to motorists include:
Lower premiums – As risk factors are more accurately measured, based on driving behavior and location, rather than lifestyle, home address, and credit score.
Driver feedback – Reports and feedback from data generated can help drivers improve performance.
Connected cars – A vehicle with a telematics system may be connected to automatic emergency notification, a vehicle locator, and remote unlocking.
Theft protection – Telematics systems can track a stolen vehicle, prevent it from starting after the ignition has been turned off, or even reduce its speed during a police chase.
Transparent claim process – Accident data will help insurers identify who is at fault, making the claim process transparent.
Benefits to employers with vehicle fleets include:
Vehicle tracking – Fleet operators can better estimate the time of delivery accurately. Law enforcement can also use vehicle tracking to locate and retrieve a vehicle in case of theft.
Remote diagnostics – Telematics systems can inform fleet operators about maintenance requirements before a breakdown, thereby reducing costly downtime.
Driver feedback – Operators can track driver behavior and provide real-time feedback, preventing accidents, improving fuel efficiency, and enabling customized training to improve driver performance.
Fuel savings – Fleet operators can identify and retrain aggressive drivers, choose more fuel-efficient routes, or improve vehicle performance.
Network Optimization – Data collected can help fleet operators remove idle time in the system and reduce overheads.
Benefits to auto insurers include:
Accurate risk assessment – Insurance companies can calculate direct risks associated with driving styles.
Fight insurance fraud – Telematics can recreate the play-by-play actions of the events leading to accidents, and accurately ascertain who was at fault.
Reduce claim costs – Driver feedback and discount incentives for good driver behavior can result in a general improvement in driving habits that can lead to reduced claims.
Technology like telematics can make roads safer, performance more profitable, and insurance rates more accurate – and this technology is still in its early stages. To learn more about the advantages of telematics for your organization’s auto insurance coverage, contact the professionals at The Reschini Group.
Source: https://www.carinsurance.org/telematics-and-car-insurance/
Copyright 2023 The Reschini Group
The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.
