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Everything you need to know about telematics car insurance and how it can help your fleet

Also called usage-based insurance, telematics car insurance is a type of insurance policy that employs auto-tracking technology to monitor people’s driving habits.

The technology monitors the driver’s behavior and tracks mileage.

With the information recorded by the tracking devices, insurance companies can adjust or set insurance rates.

Tracking devices are usually pre-installed by the car manufacturer, but you can also install them on your own using a plug-in device or via a mobile app.  

How Usage-Based Insurance Works 

There are two types of telematics car insurance programs.

They are behaviour-based car insurance and pay-as-you-drive car insurance programs. The process varies based on the insurance program you choose.  

Behaviour Based Car Insurance Program 

This type of insurance program monitors your driving habits and rewards safe driving with discounts on insurance rates.

In this type of insurance program, the monitoring technology tracks and scores your driving habits.

It also provides feedback that you can use to improve your driving.

However, the kind of behavior monitored by the tracking technology varies from one insurer to another.

Some of the most commonly monitored driving behaviours include:  

  • Hard braking 
  • Phone usage 
  • Cornering 
  • Speeding 
  • Driving at night 

These behaviors are monitored throughout the policy term.

At the end of the term, you’ll receive an insurance discount depending on how well you drove during the period.

It is important to note that insurers will only use the information from the monitoring device to determine your discount rates. It is not used to raise your insurance rates.  

Pay-as-you-Drive Insurance Programs 

While the behavior-based car insurance program determines your insurance discount, the pay as you drive program determines how much you need to pay for car insurance.

It monitors the number of miles you drive and charges you accordingly. With this program, you’ll pay more when you drive more and pay less when you don’t drive often.

The program charges you based on two rates; the base rate and fee per mile.

The base rate is calculated like the normal car insurance policy, which considers your driving record, age, and type of car.

However, the fee per mile is determined by how often you drive.  

Benefits of Usage-Based Insurance 

Some of the benefits include: 

  • Good drivers are rewarded with cheaper insurance rates 
  • The pay-as-you-drive program encourages drivers to use their cars less often. This is good for the environment and will reduce wear and tear 
  • Drivers can use feedback to improve their driving habits.  

How can Telematics Help Your Fleet? 

With the data that is gathered by telematics technology, fleet managers can monitor their fleet in real-time.

They can monitor driver behavior, vehicle health, and safety.

This data can help foster operational efficiency as you’ll have access to information that can help you save time and money.

It can also improve your customer services as you’ll be able to investigate queries from customers with real-time information on daily fleet movement without bothering your drivers.

You can also use telematics to protect your drivers with safety programs based on their performance information.  

When maximized, telematics car insurance can help you save costs and manage your fleet better. 

If you want to control insurance costs better, contact Rideshur for more innovative ideas to set up insurance policies.  

Photo by from Pexels

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