If you’re a Florida business owner, you probably noticed that your commercial auto insurance rates went up at your last renewal and you may be wondering why.
Long story made short, most insurance carriers spent more money paying claims than they made collecting premiums in 2016 and 2017. How did this happen? Every day we have more cars on the roads and more smart phones in drivers’ hands. Medical costs continue to rise as do vehicle repair costs. These are only a few of the driving factors behind the rate increases.
Is there any hope for a business owner to gain more control over these increases? Many businesses are implementing something called telematics to improve their fleet’s risk management program. Telematics is a way to monitor vehicles by combining GPS with on-board diagnostics. A few of the more common uses include tracking where your vehicles are, how fast they are traveling, what speed they are turning, and how suddenly they are braking.
Consider the issues you are facing when selecting a telematics vendor for your fleet. For example, an organization with delivery trucks may want assistance with route optimization, while a service oriented fleet may be more concerned with features such as idle time tracking. Your insurance agent can be a great resource to assist with the vendor selection process.
Once you are setup and have all the data coming in, it’s important to work on creating a suitable report that helps your management team decipher it all. Many use a ranking system or scorecard to show who are repeat offenders of aggressive driving events. Create an action plan on how to deal with your offending drivers to ensure the success of your telematics program. Proper communication and coaching of first time offenders is often the best solution, but more serious consequences may be necessary for repeat offenders.
Telematics can help a business protect their employees and fleet, which in turn will help reduce the cost of insurance. In the future, don’t be surprised to see underwriters trend towards requiring telematics as they look for ways to address the rising cost and occurrence of commercial auto claims.