Telematics provide more than navigation and logistics; insurance fleet management companies can pay for part of the device installed or provide a lower premium to attract more incentives for using this new technology. Installing a telematics device in your car could effectively assess the risk and provide feedbacks on your driving behavior. Research shows that vehicle telematics can benefit users on:

·         Driver safety: through monitoring speed, turning and hard brakes, telematics system provide assessment and coaching on daily basis.
·         Fuel efficiency, routing and logistics: Telematics can improve operational efficiency by showing the users how and where the vehicles have been used. This information can help drivers choose more efficient routes, reduce travel time and fuel consumption by reduce unwanted stops or idling.
·         Insurance savings: Insurance companies usually offer discount or considering lower premium when quoting the policy if the driver has been using the telematics effectively.
·         Accident frequency and severity: Customers will be notified of unsafe driving behavior and will be able to identify risky behaviors that can lead to accidents and damage costs.
·         Vehicle maintenance and repair: telematics device can identify potential vehicle problems and provide alert for inefficient driving styles that may cause unnecessary wear for the vehicle.
Using telematics, automobile insurance companies can determine insurers’ premium based on type of vehicle used, distance traveled, driving behavior, time and location. This concept of Pay as You Drive or Pay How you Drive provide the basis for a more “accurate means of underwriting risks” (Menzies, 2012). It is beneficial for the starters, fleet insurance help us realize that basing premiums on the past claims isn’t the best way to determine insurance costs.  Fleet Insurance can also be used by small- midsized commercial firms, by paying only for the miles covered could further reduce insurance cost can become the next step for the future.
Resources

Menzies, J. (2012, August 20). Insurance telematics could ‘flip the underwriting model on its head’. Retrieved August 27, 2012, from Truck News: http://www.trucknews.com/news/insurance-telematics-could-flip-the-underwriting-model-on-its-head/1001631122/

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