Telematics insurance policies have a longer history of being used for fleet vehicles – whether vans or cars – than by private individuals. This is unsurprising given the greater overall savings involved and the relative lack of privacy concerns involved with fleet vehicles. Furthermore many fleets have telematics devices installed for other purposes, meaning that for those firms there is no equipment cost for taking out telematics insurance policies. When seeking insurance for vans online you need to compare van insurance to find the cheapest van insurance.
The current market for fleet telematics is wider than private car insurance policies that include telematics black box devices. Many of the insurers are specialists in insurance products for businesses, and some exclusively provide fleet telematics policies and devices. Unlike private car telematics insurance policies there’s a lot more to consider than simply quoted premiums however as factors such as inclusion of features such as employers liability cover, income protection, and telematics software can be hugely important for your business needs.
When it comes to premiums there are two major options available: premiums based on mileage and premiums based on a more complex range of factors. Comparing quotes on the latter is obviously more difficult, but the savings from this form of policy could be far greater. While premiums based on mileage is simple to understand and monitor, more complex policies require constant supervision of employees driving to ensure premiums stay low. If your firm is already using telematics to keep mileage low and ensure employees drive in a way that reduces emissions, or is considering doing so as a cost saving measure, then more complex policies are probably best as you’ll already be ensuring that your fleet is driven safely and efficiently.
Should you purchase the equipment separately?
Another major choice to make is whether you want a policy which supplies the telematics black box equipment or if you’d prefer to go with an insurer which lets you choose your own telematics provider. It might work over cheaper initially to go for insurer provided equipment, but in the longer term you’ll be paying their equipment costs from higher premiums. This option may also limit your ability to have full control over what software you use to manage your fleet, and might not even allow you to adopt any fleet telematic tracking technologies for ensuring drivers are taking the best routes and driving with fuel efficiency in mind.
In general we’d recommend choosing a telematics equipment provider separately from your insurer unless you know you either won’t be using telematics for purposes other than getting cheaper insurance, or if the insurer providing the equipment will allow the data to be used by the firm for their own purposes without restrictions. Another reason to opt for a telematics equipment provider other than the insurer is for data protection purposes. If you at all gain a competitive advantage from keeping the location of your vehicles secret, which the vast majority of businesses with fleets do, then data protection needs to be priority. While telematics firms and insurers will protect your data, knowing that your equipment offer the best security and privacy is important to put to rest fears of competitors discovering your customers and suppliers.
It’s for this reason for Aviva, formerly Norwich Union, closed their original fleet telematics policy which provided a black box and instead opened up a new policy where fleets chose their own telematics provider. The original programme, and many like it from other insurers, had relatively low take-up due to privacy concerns. Remember though that not all telematics equipment will be suitable for insurers specifications. Many require features such as notifications when vehicles go over the 70mph speed limit, as well as notification of hard braking, acceleration and sharp turns at speed. You will also need to be able to identify which driver was in each vehicle at all times. Some insurers will require you to pick a equipment supplier from an approved shortlist.
Cost savings of telematics
Telematics policies are cheaper because firms using telematic tracked fleets are involved in fewer accidents and other claimable incidents. However installing the telematics box isn’t enough to make your fleet safer – a large part of the process comes down to communication with fleet drivers over their performance. Ensuring that drivers avoid driving habits that will increase premiums can be combined with making fuel efficiency savings through driving breaking and accelerating steadily.
Mileage based policies that don’t track driver performance don’t require this intervention, but doing so may be useful to cut your firms fuel bills and carbon emissions. Telematics software can also be used to ensure that drivers are taking routes that involve less miles, thus reducing your premiums.
One of the major reasons that telematics policies are cheaper is due to the reduced risk of fraudulent claims for the insurer. If your drivers are already unlikely to make fraudulent claims for personal injury then you’ll almost certainly enjoy cost savings just by adopting a telematics policy. If your drivers have had previous claims histories that affect the premiums you are paying, monitoring their current driving performance can also be a great way to reduce costs as it allows insurers a more put to date idea of improvements in their driving since their claims.
Another major advantage is cost savings for fleets of young drivers. Insurance for the under 25s is often one of the biggest motoring costs for fleets, but as telematics monitors their exact driving performance age is less of, and in some cases not, a factor in premiums with telematics fleet insurance policies. Given that insurers may eventually lose their ability to price based on age – similarly to how they have recently lost their ability to price based on gender – then telematics policies that monitor actual driving performance will become standard. Insurers, fearing their ability to price on age will be lost soon, are adopting telematics as an alternative meaning that more policy options are coming onto the market each month.
Many insurers are now offering a cash back scheme known as ‘profit sharing’ for firms using telematics policies on their fleets who meet certain targets. How realistic these targets are should be considered when comparing quotes, and it should also be remembered that
Save more using cameras
As well as monitoring location using GPS and driving performance from pedal usage, some insurers are also offering telematics policies that also make use of forward facing cameras. These cameras are used in the event an an accident to prove who is at fault, and can save insurers from paying out and you from losing no-claims bonuses in the event that they can prove the other party was at fault. The cameras generally have a cost of around £200 per vehicle, although some are slightly cheaper. They will typically record onto cheap, small storage in the form of an SD card. Some save the camera footage based on events that indicate an accident such as high pressing on pedals or collision detection, while others require the footage from the time of the accident to be manually saved to prevent it being recorded over.
£200 might seem quite a high price to pay per vehicle, but compared with the excess that has to be paid in the event of an accident it typically isn’t too high. Furthermore the cameras are built to last, meaning the cost won’t need to be repeated for many years and savings in premiums can pay for the cameras.
You may also want to consider installing more cameras on your vehicle if you are at risk of claims from damage to parked cars. Some vehicles such as delivery vehicles and trash collection vehicles are particularly at risk from these claims, and having cameras on your vehicle can protect you from this and in some cases can lead to premium discounts from your insurer.
The cameras have been shown to make small improvement to driver behaviour even though they don’t monitor the cabin, but the major savings for the insurer comes from knowing that firms with the devices installed won’t be involved in fraudulent claims such as the notorious ‘cash for crash’ schemes.
A very different use of cameras is giving audible notification to drivers of hazards. Technology developed by Mobileye for instance monitors lane position as well as other road users including pedestrians and traffic, and will tell drivers that there is a danger ahead. This can be particularly useful in stopping accidents that occur due to driver tiredness. Many insurance policies give generous discounts for the inclusion of such technology, in some cases a discount in excess of 10%. The technology is still quite new to the UK, but is being regularly used in other countries by fleet insurers.
Additional features
Some telematics insurance policies come with additional features included. One of the most valuable of these is theft tracking, which will provide you with information that can be used to recover your vehicle and provide police with evidence to convict criminals who target commercial fleets. This isn’t an experimental technology: it’s been proved in practice, leading the recovery of a quarter million vehicles worldwide already. Even if your vehicles and their contents are insured against theft recovering the vehicle can save you both the excess and the time and stress involving with replacing stolen vehicles and goods. Some insurance policies with telematics include this automatically, others offer it as an add-on with a monthly cost per vehicle of around £10.
Like non-telematics policies, you’ll also have to choose from options such as cover for business interruption or income protection from accidents or theft. Other options available include breakdown cover, windscreen cover, vehicle contents cover (goods in transit insurance), legal experiences and both employers and public liability. If these are options are worthwhile will depend on the specific circumstances of your business, and in many – but not all – cases it can be cheaper purchasing these separately from your fleet insurance.
Some insurers will also offer driving training as part of the insurance policy. This will help your fleet drivers to get used to the technology and provide valuable advice on how to drive in ways that reduce premiums. Some insurers will also offer ongoing support for fleet drivers including motivational league tables. Training will also often be provided to fleet managers in both how to reduce premiums when using telematics and wider telematics uses such as reducing emissions, ensuring drivers take the best routes through geofencing and traffic management.
Making a choice
Choosing a fleet telematics insurer isn’t a simple choice and, as with all significant business expenses, significant thought should be put into the options and quotes obtained from any many providers as possible. As quotes will often be more complicated to compare than traditional insurance policies it can often be best to run them past several business decision makers including the fleet manager before making a decision. Also, whether it is commercial van insurance or small van insurance you can check with companies like commercial vehicle direct to get van insurance quotes and find the cheapest van insurance.
