How telematics can revolutionise fleet and personal drivers
Are you a good driver? According to the AA, when questioned, nearly 70% of drivers rate themselves as above average, with only 0.8% of drivers rating themselves below the curve.
Telematics, the branch of car insurance whereby consumers can have a monitoring device, or ‘black box’ fitted to their car which records data about their driving – and rewards ‘good drivers’ with better premiums – is starting to becoming more commonplace.
Ernst & Young predicts that this new technology will be built into 88% of new cars by 2025 – that’s 104 million vehicles.
‘Black box’ insurance gives drivers the chance to prove their skills; telematics could help fleet businesses lower their outgoings by decreasing their insurance overheads, as well as helping to lower the insurance premiums of careful consumers.
What are telematics?
Traditional insurance policies take into account factors such as how long you’ve been driving and your occupation. Telematics goes one step further, monitoring stats about your driving.
A device is fitted to your car which collects data on things like: how you’re cornering, how fast your acceleration is, and how smoothly you brake – factors which are then used to determine how likely it is you will have an accident. Insurers then adjust your premiums accordingly.
Some providers also take into account how often you use the car, and at what time – commuters travelling in rush hour are statistically more likely to have an accident than those driving during the day, for example.
How could it affect car insurance?
The policies work slightly differently to traditional insurance, and it’s possible to pay cover by the mile, or get cover which insures you for a certain number of miles, with the price varying at different times of day. This, ‘User Based Insurance’ or ‘Pay As You Drive’ system, potentially offers better premiums for certain types of drivers.
This can work to your advantage if you’re a good driver or if you rarely get behind the wheel, and makes sense when you consider the odds, for example, someone with a long commute has a higher statistical risk of potential accidents than someone who uses their car just once a week.
For drivers this has the potential to be very positive, in particular for fleet drivers, who could make large savings on their day-to-day business expenses.
How could it help fleet drivers?
As well as a great tool for consumers, companies which have a fleet of vehicles, for example, a delivery company or a taxi company, could use telematics to help reduce their business costs and increase driver safety.
As well as potentially lower insurance premiums, SMEs that regularly use a car or have a business where transport is involved in their day-to-day functioning, could also help use telematics to score their driver style and behaviour, helping to reinforce safety and even keeping maintenance costs down.
Ultimately this tool has the potential to save your business money.
An extra set of eyes
GPS telematics tracking in fleet cars can help streamline the business as owners can keep an eye on both vehicles and employees. Data about drivers will help the company work out how long it will take drivers to reach their destination, potentially increasing the efficiency of the company’s services. It’s also handy in the unfortunate event that one of your vehicles gets stolen. There’s even claims that the ‘Big Brother’ effect – knowing that your habits are being monitored – helps encourage safer driving.
Are there restrictions?
There can be restrictions, including where and when you can use your car. It’s worth looking for any costs associated with getting the black box installed, as well as what happens when you cancel your policy.
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