More and more, insurance companies are rewarding drivers who use telematics with lower premiums...

More and more, insurance companies are rewarding drivers who use telematics with lower premiums or rate rebates. Event recorders are another win-win strategy, as they can both record driver behaviors and identify the cause of a crash. 


When an insurance company determines the cost of premiums, it depends on how much of a risk you present. By assessing your drivers, the characteristics of your fleet units, and the nature of your business, an underwriter creates a risk profile. 

The higher the risk, the steeper the premiums. Wouldn’t it be nice if you could write your own risk profile instead?

In some ways, you can. By taking steps to improve driver behavior, reduce accidents, and create a culture of safety, fleets can improve their risk profile and lower their insurance costs. 

Tip #1: Hire Safe Drivers, Then Train Them Properly

According to the National Highway Traffic Safety Administration, 94% of the time, drivers are at the root cause of crashes. When the likelihood of a crash comes down to the person behind the wheel, hiring the right drivers and training them properly is critical for preventing collisions and lowering insurance costs. 

Peter Niro, truck product development manager at Progressive Insurance, said hiring should start with a close look at a driver’s history. 

“Fleets should check the motor vehicle history of their drivers, as a driver with a clean motor vehicle record, meaning no accidents or violations, may contribute to lower insurance costs,” he said. 
Performing a thorough check of a driver’s background early on makes a difference in the future. 

“How good the driver is and how well the insured selects the individual driving that vehicle makes a big difference,” said Tommy Ruke, founder & education director for the Motor Carrier Insurance Education Foundation. “Red flags on a driver’s MVR include driving too fast, following too close, not using the turn signal, and running red lights. Having a pre-employment screening program in place to identify unsafe drivers pays off.”

Tim Horgan, chief marketing officer for insurance brokerage Hub International, agreed that the driver a fleet hires and how well they’re coached could improve a fleet’s safety record. 

“It’s all about driver hiring and driver training,” he said. “Robust protocols in both areas will have a positive impact on reducing accidents.”

Tip #2: Address Driver Behavior

Training drivers is essential, but it’s not a cure-all. Even drivers with the most robust training can exhibit unsafe behaviors. If fleets want to reduce crashes, they must follow up by addressing dangerous driving habits. 

“Drivers can control how fast they’re going, how they operate the vehicle, and how aggressive their driving is. Those are the things that cause crashes,” said Ruke of the Motor Carrier Insurance Education Foundation. 

Ryan Driscoll, VP of marketing for fleet technology provider GPSInsight, said there are some key behaviors to look out for — and that taking steps to correct them can achieve big safety gains. 

“The number one thing fleets can do is to address behaviors like rolling through stop signs and stop lights, tailgating, and distracted driving,” he said. “Coaching really is the key to long-term success. Fleets that coach consistently will do better, which can translate to better insurance rates.”

Steve McKay, CEO for small business insurance provider Pouch, said a driver’s mindset about driving also plays a role in accident prevention. 

“The fastest and most effective way to reduce accidents is to increase driver mindfulness. Simply planning to drive more carefully can reduce accidents by 30%,” he said. “When a business owner purchases a policy through Pouch Insurance, they automatically receive free telematics software, which is one of the best ways to manage their fleet and help reduce accidents. Owners will know which drivers are driving safely and which might be causing issues. The owner can then address the situation, hopefully before an accident. Safer driving is the best way for fleets to reduce their insurance premiums. Solid training and ensuring the drivers abide by the rules of the road will help reduce insurance costs.”

Tip #3: Use Telematics

One of the best ways to identify unsafe driving behaviors is telematics. Instead of training drivers and hoping they follow the guidance, telematics gives fleet managers data that allows them to track driver behavior.

“Telematics and other sensors are becoming increasingly common in all lines of insurance. Telematics puts the business owner in charge of their fleet by allowing them to be ‘inside the truck’ and informing them of risky driving behavior,” said McKay of Pouch. “Telematics can not only lower your commercial auto insurance; it allows you to manage your drivers when they are out on the road. You’ll know who is driving safely and who isn’t. You’ll know who is helping the company and who is putting the company at risk.”

McKay said that sometimes telematics data could be eye-opening for fleet managers. 

“We’ve seen very high speeds — 95 mph and even over 100 mph — recorded by a driver immediately after implementing a telematics system,” he said. “Business owners can never believe it.” 

Training drivers is essential, but it’s not a cure-all. Even drivers with the most robust...

Training drivers is essential, but it’s not a cure-all. Even drivers with the most robust training can exhibit unsafe behaviors. 


Tip #4: Use a Driver Scorecard

Driver scorecards, which assess a driver’s behavior using telematics data, calculate an overall safety score that can serve as a helpful training tool. 

When drivers can see the data in an easy-to-read format, it helps them understand their areas of improvement — and that’s a positive step forward for accident prevention.

But driver scorecards can serve another fundamental purpose: They can make you look good to insurers.  

“Using driving scorecards shows that a fleet is committing time and resources to safety protocols. If your driver scorecards show improvement over time, that puts you in a better position to show that your organization is the kind of client they want. Using scorecards and telematics can help you prove that your fleet presents a lower risk,” said Driscoll of GPS Insight. “Most metrics that underwriting uses are reflexive, looking at past behaviors such as MVRs or past claims, but using a tool with indicators of current performance shows that you are actively engaging current behaviors before an accident or driving violation can occur.”

Driscoll shared that the best approach to take with insurers is to show a two-year improvement. While that may seem like an extended timeframe, it shows that the progress isn’t a fluke.

If two years of data aren’t available, Driscoll advised fleets to demonstrate their strategy: First, document the fleet and drivers’ issues. Then, demonstrate what you’re doing about them: show how you benchmarked the fleet’s performance, what behaviors you’re measuring, what policies you’ve put in place, how you’re coaching drivers, and what your results are so far.

Tip #5: Leverage Event Recorders and Dash Cams

Event recorders are another win-win strategy, as they can both record driver behaviors and identify the cause of a crash. 

Conventional telematics can identify unsafe driving behaviors like hard cornering or sudden braking, but they don’t capture dangerous behaviors such as distracted driving, tailgating, or rolling stops. 

“That’s why you see so many fleets turn to video telematics like dash cams,” said Driscoll of GPS Insight. “At the top tier, some cameras can detect unsafe driving habits and automatically calculate a safety score for each driver. Management can get automatically generated charts assessing individuals as well as the entire fleet. That information allows managers to have fact-based coaching sessions with drivers to reduce unsafe driving habits.”

Dashcams can also help fleets avoid false insurance claims that can cause their premiums to skyrocket. 

“We had a situation where one of our clients installed a dashcam in their vehicle — 30 minutes later, another vehicle crashed into them and made some very outrageous claims that two occupants, including a child, were ejected from the vehicle,” Driscoll said. “The dashcam proved that false.”

When costly settlements are on the line, dash cameras can serve as the most reliable witness during litigation. 

“To know how the event really happened, you have to have a camera in the vehicle,” said Ruke of the Motor Carrier Insurance Education Foundation. “Insurers are looking at that more frequently and requiring it more often. The Florida Supreme Court and most federal courts say an event recorder overrides witness statements. That means evidence of what happened from a camera is credible even if it contradicts an eyewitness. If you have a camera, you have no dispute over what happened.”

Tip #6: Don’t Skip the Vehicle Tech

The Intelligent Transportation Systems Joint Program Office estimates that vehicles equipped with Advanced Emergency Braking System (AEBS), Adaptive Cruise Control (ACC), Lane Departure Warning (LDW) reduces the crash rate by 47%. 

Although these systems can cause collision repairs to be more costly, it’s better to gamble on preventing the crash in the first place. The catch is that sometimes fleets are tempted to skip features like these due to the up-front costs. 

“Use of the new anti-crash mediation and driver help systems on commercial vehicles can’t stop all crashes. But they can slow down and stop the impact of crashes, which, in most cases, lessens the severity,” said Ruke of the Motor Carrier Insurance Education Foundation. “Sometimes vocational fleets delete those items, but they need them desperately.” 

Fleets seeking to improve their safety resumé should resist the temptation to pass on Advanced Driver Safety Assistance (ADAS) systems

 “Use of technology to assist in managing risk has quickly emerged as one of the most effective actions an insured can do to improve their risk profile,” said Horgan of Hub International.

Tip #7: Take Advantage of Insurtech

More and more, insurance companies are rewarding drivers who use telematics with lower premiums or rate rebates. This “insurtech” allows insurance companies to more closely track driver behavior and get data that informs their risk profile. 

The hope, too, is that drivers aware of their behaviors are tracked, and with rewards for safe driving, they will behave better on roadways. 

“We have seen some new insurance programs that depend heavily on telematics data in their risk selection and pricing. The discounts will be driven by a reduction in claims dollars paid out,” said Horgan of Hub International. “It’s still too early to make a definitive statement, but intuitively the utilization of tech data will assist in the managing of risk that should reduce the number of accidents. Documenting driver qualification files that meet or exceed standards will also provide a defense in a catastrophic accident.”

Progressive’s Snapshot ProView is one such telematics program. Available to fleets with up to 40 vehicles or 20 tractor-trailers that do not use an electronic logging device, Snapshot ProView can save Progressive customers a minimum of 5% on their commercial auto policy. 

“With access to rich telematics data and the ability to analyze the data, an insurer can offer a more accurate insurance premium by measuring driving behaviors that correlate with accident risk. Telematics programs are unique in that they allow a customer to influence the cost of their insurance and may reward them for safe driving habits in the form of lower rates,” said Niro of Progressive. “Apart from telematics data, safety technology like dashcams can help business owners monitor and promote safe driving habits and can help establish facts of loss in the event of an accident.”

Driscoll of GPS Insight has seen insurtech payoff. 

“We have a great example of more than 26 fleets that took part in a two-year study with Amerisure Mutual Insurance Company. These were all fleets that were considered high risk. They had a considerable number of at-fault claims, too. Collectively, they cost Amerisure more in claims than they generated in premiums — the group’s loss rate was 117%,” he said. “By deploying GPS tracking, they were able to reduce their loss rate to 30%. That’s without even using video telematics. This saved many of these fleets from having to go to the secondary market for surplus lines insurance.”

Tip #8: Demonstrate a History of Safe Operations

Telematics can help fleets identify unsafe driving behaviors and potentially lower insurance premiums. But if not used correctly (or at all), telematics can work against fleets.

“Often, companies will purchase a robust telematics system, but they don’t do anything with the data. This creates additional liability for a company if they have data representing poor driving habits but don’t take any corrective action with the employee(s). If one of those drivers is involved in an accident, that data will be used against the company, and a subpar attorney will win those cases all day long,” explained Driscoll of GPS Insight. “In the past, you would get a gold star from an underwriter if you had telematics. Today, they’re looking deeper to see what you are doing with the system you have. We’ve seen companies get non-renewed on their auto liability policy based on this alone.”

How a fleet uses (or fails to use) telematics is just one piece of the puzzle insurers assess. To improve their risk profile, fleets must think about how safety plays out in their entire operation.  

Ruke of the Motor Carrier Insurance Education Foundation said today insurers look beyond accident history to decide whom to insure and for how much. 

“A ‘good’ risk is favorable, but the definition has changed. It’s more than past crashes. It’s the culture of safety,” he added. “The insurance industry has become more aware of the factors that go into a culture of safety and what’s a preferred risk.”

When fleets take a more holistic approach to safety, it can pay off in lower premiums. 

“Maintaining strong operating history is a key element to controlling insurance costs,” said Niro of Progressive. “Performing regular vehicle maintenance can also help fleets save on insurance costs by mitigating the risk of incurring violations when inspected and ensuring the vehicle is safe to operate on the road. Investing in vehicle safety technologies may also contribute to lower accident frequency and lower insurance costs. It’s important for a fleet to build a safety and compliance culture to both save on insurance costs and to help keep our roads safe.”

Insurers aren’t the only ones looking at fleets’ operating history. Lawyers are, too. When cases go to trial, fleets can be susceptible to the Reptile Theory — a trial strategy that appeals to the brain’s fear center also referred to as the “reptilian” part of the brain. In essence, this strategy suggests to the jury that if they don’t punish the defendant with a large settlement, they won’t be deterred from letting the same thing happen again — and that’s a danger to both themselves and their community. 

“The focus isn’t on what the driver did that day but is instead on the fact that the company is an unsafe company and they should be punished for being unsafe — period,” Ruke explained. “How well did the insured screen that driver? What are their hiring and discipline standards? What does their handbook say about what they can and cannot do (e.g., speed or driving in foul weather). Lawyers are looking for any violations where a company doesn’t adhere to their own rules, even though the driver did nothing wrong.”

Benefits Beyond Insurance Costs

When fleets rewrite their risk profile, it can lower insurance costs. But moreover, these same steps can help them reduce the costs associated with crashes and create a safer workplace for employees. 

About the author
Shelley Mika

Shelley Mika

Freelance Writer

Shelley Mika is a freelance writer for Bobit Business Media. She writes regularly for Government Fleet and Work Truck magazines.

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