Telematics in Auto Liability: Keeping an Eye on your Fleet

The auto liability insurance marketplace has become challenging secondary to escalating claim settlements, the epidemic of distracted driving, and to some extent highly publicized crashes and sensational settlement costs. From a company view point, if you have vehicles that employees drive on business, no matter who owns the vehicle, you have a fleet exposure. And there are controls you should consider to help protect your employees and put underwriters at ease when they are pricing your program.

There are fundamental controls such as MVR checks or monitoring, electronic device and distraction policies, point systems, ensuring employees who drive their own vehicles have a solid layer of personal insurance in place, and several other tried-and-true controls underwriters are familiar with. Telematics systems have joined these familiar control tools for owned fleet vehicles and even long-term leases.

So what is a telematics system? The most basic definition is: a data collection system that makes your fleet's activity visible to you as the fleet owner. This can include speed, hard cornering, hard braking, near misses, crashes, in-cab behaviors such as cell phone use, closing one's eyes for prolonged periods, lane departures, improper following distance, and more.

There are different types of systems, each with their own strengths and weaknesses. There are, of course, systems that straddle some of these categories:

• Cell phone apps: Though some would argue that a cell phone app is not a telematics system in the truest sense, these apps are proliferating and some employers are utilizing them. Weaknesses include possible distraction, defeating the app, and less accurate data. One possible strength is cost.
• GPS systems started as a way to geo fence and track fleets for scheduling, routing, and gas use. These systems have grown to include speed and in some cases hard acceleration and braking. Weaknesses include limited data and possibly lower sensitivity.
• Standalone accelerometers and engine monitoring: Both can provide a great deal of information related to what the vehicle is doing and experiencing but don't necessarily give you specifics about reasons behind the driver's actions.
• Video systems: These systems are generally set up so that the system records both in front of the vehicle and inside the driver's compartment. In this way, the system provides information related to reasons for the driver's reaction. Most video systems are activated via an accelerometer. Strengths include behavior insights, its use as a coaching tool, and its exoneration capabilities. One weakness may be cost.
• Driver Monitoring Services: One company specializes in monitoring a driver's eyes to recognize fatigue or distraction. If either is detected, the service activates a seat vibrator and audible alarm; it also records a video.

If you are considering a telematics system, it's important to identify your goals. Then determine which system can help you meet those goals with the least difficulty and cost. Each system type and provider has their strengths and weaknesses.

Though there are many more aspects of telematics systems than covered in this article, for now, consider this as you further decide whether or not you will use a telematics system: What will you do with the data? Each provider has their own tools for monitoring and dashboarding data. Some providers preview videos to weed out false triggers like an accelerometer set off by a pothole. Others provide information and custom reporting to support coaching and training assigned to struggling drivers. The volume of data can be overwhelming and you should have a plan in place to handle and react to the data. Knowing you have an issue, documenting it, but doing nothing about it can cause problems.

If you wish to further explore this type of control or any of the traditional controls to decrease your fleet exposure or to make your company more appealing to the marketplace please contact your Woodruff Sawyer account team.