The way a fleet is driven has a direct impact on insurance costs, and for many businesses, small changes in behavior could lead to big savings.
Risky driving habits – whether it’s speeding, harsh braking, tailgating, or distraction behind the wheel – don’t just put drivers and other road users at risk, they also have a massive impact on insurance premiums. And with the cost of fleet insurance rising fast, there’s never been a more better time for businesses to take control.
Driving for a living is risky business
Insurance providers calculate fleet premiums based on risk. The more claims a business makes, the higher the risk it appears to insurers, and the more expensive cover becomes.
And claims aren’t cheap. According to recent UK insurance data, the average claim for a serious road collision costs businesses around $70,000 when you factor in repairs, downtime, liability costs, and increased premiums. Even minor incidents can have a lasting impact, with small claims adding up and pushing fleet costs through the roof.
- More claims = higher premiums – Every claim made on a fleet insurance policy increases costs. A business with a high claims history can expect renewal quotes to rise by 20-50% year on year.
- Liability payouts can quickly become costly – When a driver’s actions lead to an accident, the business is responsible for the financial fallout. Legal costs, compensation, and claims can add up quickly, and in the worst cases, the financial impact can be enough to shut a company down.
- At-fault accidents damage reputation – Multiple at-fault claims can lead to insurers labelling a fleet as high-risk, making it harder (and more expensive) to secure cover in the future.
Bad habits that are hitting fleet operations hardest
Not all bad driving behaviors are obvious, but insurers and fleet managers are well aware of the most common ones that inflate insurance premiums:
- Speeding – It’s not just illegal, it’s expensive. Speeding increases the severity of accidents, leading to bigger insurance payouts and more damage to vehicles.
- Harsh braking & rapid acceleration – These are telltale signs of aggressive driving, which leads to more accidents, plus higher fuel and maintenance costs.
- Distraction at the wheel – The Insurance Institute for Highway Safety (IIHS) reports that nearly 25% of all accidents in the U.S. involve some form of driver distraction, and mobile phones are a leading contributor to this. Eating and drinking, or even adjusting the radio can result in rear-end collisions and costly claims. Insurers know that distracted drivers are more likely to cause accidents.
- Tailgating – Following too closely means drivers have less time to react. This behavior is one of the top causes of preventable road collisions and it is particularly important for trucks – due to their weight and size, they have much longer stopping distances compared to smaller vehicles.
- Cornering too fast – Taking corners aggressively increases wear on tires, damages suspension, and leads to vehicle instability, making rollovers and collisions more likely.
The knock-on impact of a high-risk fleet
If fleet drivers consistently display risky behaviors, the long-term financial impact can be severe. Beyond the obvious rise in insurance costs, businesses also face increased downtime as vehicles involved in accidents aren’t generating income. Repairs and replacements take time, which significantly hampers productivity.
Additionally, poor driving habits like excessive braking, rough acceleration, and harsh cornering lead to faster wear and tear on fleet vehicles, driving up maintenance costs and shortening their lifespan.
A poor safety record can also result in the loss of contracts, as clients are less likely to work with businesses that have a history of accidents and claims, making the company seem unreliable.
Furthermore, repeated claims can lead to rising excess costs, with insurers often increasing the excess amount, meaning businesses are forced to pay more upfront before their policy covers damages.
How fleet managers can reduce insurance costs
But, it’s not all doom and gloom. Fleet operators can take proactive steps to tackle rising insurance costs. Here’s what can be done to reverse the situation:
Invest in fleet safety technology
Investing in technology is a proactive way to support your drivers and reduce insurance costs. Take driver monitoring systems, for example – they provide instant alerts if a driver becomes drowsy or distracted, helping them stay focused on the road.
AI-powered cameras also detect vulnerable road users and other hazards outside the vehicle, warning drivers in real time and preventing accidents before they occur. In the unfortunate event that an incident does occur, dashcams and vehicle cameras provide indisputable video evidence, making it easier to dispute false claims and protect your business.
Adding telematics into the mix gives fleet managers valuable insights into driver behavior. Some insurers now offer usage-based insurance (UBI), where premiums are based on actual driving behavior. Safe fleets can benefit from lower rates.
Introduce incentivized driver training programmes
Introducing interactive driver training programmes is a powerful way to improve safety and lower insurance costs. By using real data from the before mentioned telematics and cameras, fleet managers can provide targeted coaching that helps drivers learn from their own driving. This not only enables drivers to improve their skills but also boosts their driver score, which can significantly reduce accident rates and keep premiums low.
Additionally, rewarding safe driving can create a culture of accountability and motivation within your fleet. Many fleets are implementing incentive schemes, offering bonuses or other rewards for drivers who maintain excellent safety records. This encourages drivers to take extra care on the road, resulting in fewer incidents, improved driving habits, and ultimately, lower insurance costs for the business.
What’s more, insurance companies are so impressed by businesses that invest in this kind of technology that they’ve even been known to co-fund the installation of fleet safety solutions. It’s a win-win situation: your fleet gets the tech it needs to stay safe, and your insurance premiums are reduced as a result.
Shaping a safer, more affordable future for your fleet
With insurers cracking down on high-risk fleets, operators who take a proactive approach to safety will be the ones securing the best deals. It’s not just about reducing costs – it’s about protecting drivers, vehicles, and the future of the business.
Want to find out how CameraMatics can help lower fleet insurance costs? Book a demo with our team today.
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