Reduce Your Fleet’s Insurance By 15% With OBD-2 Vehicle Monitors
As businesses work to improve their bottom lines they often overlook beneficial programs that are right under their noses. Many businesses can reduce their vehicle fleet insurance premiums by as much as 15% by implementing OBD-2 fleet management telematics systems that track vehicle utilization and driver performance. While not exactly the same as usage based insurance UBI offerings from companies like Progressive Insurance the financial return for any business can be even more impactful than the consumer savings.
Before you even consider implementation you’ll need to check with your insurance company to determine if they offer a premium reduction program for the implementation of a telematics system. If they don’t, you should start shopping for one that does.
Insurance companies will offer these benefits to nearly any business that complies with their program requirements. All businesses potentially qualify including small businesses like HVAC, contractors, landscapers, lawn care and other service companies.
You don’t need an expensive GPS tracking solution to reap these insurance benefits. Many insurance companies are already familiar with OBD-2 telematics systems in their UBI programs. Progressive’s Snapshot is a well-known OBD-2 vehicle monitors product used to develop usage and driver profiles on consumer vehicles.
OBD-2 fleet management monitors are already in use in many enterprises to manage fleet maintenance and driver behavior. It is an easy step to use the same system to claw back savings from your insurance company.
Prove your fleet’s utilization patterns
Absent real management data an insurer makes assumptions about your fleets usage. Sometimes that is helpful and sometimes if is harmful to the premium calculations that they make. The ability to document vehicle use on a daily, monthly and anuual basis helps an insurer develop a better risk profile for your business.
Good OBD-2 vehicle monitors will implement a data logging function that tracks and documents a vehicle’s utilization patterns. It should track individual trips to provide the average working hours of a fleet vehicle. Insurance companies will charge more for fleets that have significant overnight driving hours.
Tamper proof data collection
Make sure the system you select is tamper proof. Your insurance company will require this. While it you can’t permanently install an OBD-2 telematics device in your vehicle it is possible for the system to track tampering events and removals which alert the system to attempts to use a vehicle to avoid detection. Even GPS devices installed under the hood can be tampered with so make sure that you choose one of those that reports any efforts to disable it.
The data that gets collected from the OBD-2 devices must also be secure and tamper proof. This means that your OBD-2 fleet management system must support storage of the primary usage information in a secure location – preferably the cloud where the business and its employees can’t delete or manipulate the data.
Monitor the performance of your drivers
A common qualification requirement is that you implement a company policy on the use and driving rules for your fleet vehicles. Set clear rules and identify the steps that will be taken to test adherence to those rules. Once the rules are in place you may need to implement a management review of vehicle and driver profiles to guarantee adherence. Your insurance company may require that you file this document as part of your program eligibility requirements and may have templates for you to use to build your own.
Some of the issues you’ll need to think about include:
- vehicle and driver operating hours
- speeding rules
- distracted driving rules
- safe driving rules
Remediate any issues
Of course, once you identify any problems you’ll need to document how you solved them. Insurers want to be sure that you are paying attention to the types of behaviors and usage that increase your risks and that you’re actively involved in remediation efforts when they’re required.
OBD-2 fleet management benefits
There are many additional benefits that accrue to businesses that implement OBD-2 telematics. Reducing insurane premiums is a great benefit that can help a company afford to implement a telematics based fleet management system so that they can enjoy the additional benefits that come from better fleet maintenance, driver performance monitoring, fuel use and fuel economy analysis and more.
The good news is that these systems don’t have to cost you a lot for you to start reaping the rewards.