5 Key Telematics Metrics to Lower Your Insurance Rates
PUBLISHED: February 20, 2025
In today’s digital world, technology is transforming the way businesses manage their fleets and insurance costs. One of the most significant advancements is the integration of telematics, which provides real-time data on driving behaviors. Commercial auto insurance companies, like VeriDrive Insurance Agency, are leveraging telematics to offer behavior-based insurance (BBI) policies, enabling businesses to lower their insurance premiums based on their drivers’ actual behavior behind the wheel.
Telematics technology continuously tracks a variety of metrics that can help businesses reduce their insurance costs. In this blog post, we’ll explore five key metrics tracked by telematics and explain how they impact insurance rates.
1. Speeding Habits
Why it matters:
Speeding is one of the primary contributors to accidents and fatalities. Telematics systems continuously monitor a vehicle’s speed in real time, allowing businesses and insurers to understand how frequently drivers exceed speed limits.
How it affects your insurance premiums:
Drivers who regularly speed are considered higher risk, which typically results in higher insurance premiums. Conversely, businesses with drivers who consistently obey speed limits can demonstrate safe driving practices and reduce their risk profile. Insurance providers will often offer lower rates to businesses that show good speed control, rewarding them for reduced accident potential.
What you can do:
Encourage your drivers to maintain safe speeds. Telematics data can help identify patterns and address them with driver training programs, leading to safer driving habits and, ultimately, lower premiums.
2. Harsh Braking and Acceleration
Why it matters:
Harsh braking and rapid acceleration are indicative of aggressive driving, which can increase the likelihood of accidents, especially in heavy traffic or on slippery roads. Telematics systems track these behaviors and provide insights into the overall safety of each driver.
How it affects your insurance premiums:
Insurance providers view aggressive driving as a risk factor, as it leads to more frequent and severe accidents. By reducing instances of harsh braking and acceleration, businesses can improve driver safety and show a better risk profile to insurers, which can result in a reduction in insurance rates.
What you can do:
Leverage telematics data to monitor and coach drivers on smoother driving techniques. Promoting safe driving habits not only lowers the risk of accidents but can also qualify you for discounts on your commercial auto insurance.
3. Route Planning and Mileage Tracking
Why it matters:
The routes taken by drivers and the distance traveled can have a significant impact on the risk associated with each trip. Telematics can track routes efficiency, identify areas of frequent congestion, and monitor overall mileage. Poor route planning can lead to increased fuel consumption, wear and tear on vehicles, and longer, riskier trips.
How it affects your insurance premiums:
More time on the road means more exposure to potential accidents. If drivers are taking longer, riskier routes, they increase their chances of getting into an accident, which in turn raises insurance costs. Efficient route planning reduces unnecessary mileage, limits exposure, and can lower accident risk.
What you can do:
Use telematics to optimize your fleet’s routes, reducing unnecessary mileage and avoiding high-risk areas. Efficient routes not only help lower your insurance premiums but also save on fuel and maintenance costs, boosting overall business efficiency.
4. Idle Time
Why it matters:
Idle time refers to the periods when vehicles are stationary but still running, such as during long stops or traffic jams. Prolonged idling leads to increased fuel consumption, engine wear, and carbon emissions, but it also signifies inefficient vehicle usage. Telematics systems monitor idle times and help businesses identify opportunities to reduce it.
How it affects your insurance premiums:
Excessive idling increases operational costs and can signal poor fleet management practices. From an insurance perspective, inefficient fleet operations can lead to higher premiums. By reducing idle time, companies can demonstrate that they are managing their vehicles efficiently, leading to potential insurance savings.
What you can do:
Encourage drivers to turn off their engines during long stops or periods of inactivity. Use telematics data to identify and reduce excessive idling, improving fuel efficiency and lowering operational risks, which could result in lower insurance premiums.
5. Driver Behavior and Event Alerts
Why it matters:
Telematics systems often include event alerts that notify fleet managers about sudden, risky behaviors such as swerving, hard turns, or near-miss incidents. These behaviors can indicate a higher likelihood of accidents or driver fatigue. Monitoring these events allows businesses to intervene and prevent accidents before they happen.
How it affects your insurance premiums:
Insurance companies reward proactive businesses that demonstrate the ability to identify and address risky behaviors before they lead to accidents. By using telematics data to correct unsafe driving habits, businesses can reduce the frequency of claims and show insurers that they are taking steps to mitigate risk, which can result in lower insurance rates.
What you can do:
Take advantage of event alerts to monitor driver behavior in real-time. Implement driver training or corrective measures to reduce risky behaviors and improve overall safety, leading to potential savings on your commercial auto insurance.
Conclusion
Telematics offers a wealth of data that can help businesses manage their fleet’s performance and reduce their insurance premiums. By tracking key metrics like speed, braking, route efficiency, idle time, and driver behavior, companies can proactively manage risk and demonstrate to insurance providers that they are making efforts to keep their drivers and vehicles safe. This results in lower insurance rates, enhanced safety, and improved operational efficiency.
If you're ready to start leveraging telematics to reduce your insurance costs and improve fleet safety, VeriDrive Insurance Agency can help. Contact us today to learn how we can provide tailored insurance solutions that reward safe driving practices.
