Are you a safe driver looking to save money on commercial trucking insurance? Pay-how-you-drive insurance may be the answer. Insurance companies can better determine risk by tracking your driving behavior using telematics to offer lower premiums to less risky drivers.
Learn more about pay-how-you-drive insurance for truck drivers and discover how these policies can lower insurance costs while improving driver safety.
What is pay-how-you-drive insurance?
Pay-as-you-drive (PAYD) insurance, also called usage-based insurance (UBI), uses mileage and driving habit data to determine fair insurance premiums. Using telematics, insurance companies track driving behavior to develop quotes for potential customers.
For excellent drivers, pay-how-you-drive insurance can help reduce insurance costs. In most cases, the recorded driving data is available to drivers to help improve their driving skills. PAYD insurance can help save costs and make the road safer for everyone.
How does pay-how-you-drive insurance work?
Insurance companies already consider driving skills and habits when deciding what to charge their customers. The difference with pay-how-you-drive insurance is that a telematic tracking device is installed into the insured vehicle to record driving data and relay this information to the insurer.
The insurance company then uses the data collected through telematics to analyze your driving risk. Based on this driving data, the insurer sets lower premiums for less risky drivers.
These telematics devices may record the following driving information to determine how safe of a driver you are:
- Speeding
- Hard braking
- Sudden or gradual stopping
- Acceleration
- Turning or swerving
- Mobile phone usage
- Miles driven
- Nighttime driving
4 ways truck drivers and fleets benefit from pay-how-you-drive insurance
Trucking fleets and owner-operators can be rewarded for excellent driving with PAYD insurance. Some of the benefits of telematics insurance within the trucking industry include driving habit tracking, improved driver safety, fair insurance costs and incentives for better driving.
Tracking driver habits
Pay-how-you-drive insurance relies on telematics systems that are installed into trucks to track driver habits that indicate aggressive, distracted or irresponsible driving. Some of the metrics these devices record include speed, acceleration and braking patterns. By tracking driving habits and analyzing this vital data, drivers can be proactive in improving their driving skills.
Improving driver safety
Safety is paramount in the trucking industry. A significant benefit of PAYD insurance is that the information collected on driver behavior and vehicle performance is available for drivers to review. With this knowledge, drivers can improve their driving, which can help boost their safety scores, protect their personal safety and grow their careers.
Fair premium costs
Fair insurance policies, such as pay-how-you-drive insurance, reward good drivers with lower premiums. Meanwhile, riskier drivers have higher premiums, which makes sense since they’re more likely to be involved in an accident. Whether you’re an independent driver or a fleet manager, safe driving behavior can help save money with PAYD insurance.
Better driving incentives
Tying insurance costs to driving behavior is a huge incentive for truck drivers to drive more safely. Not only does pay-how-you-drive insurance encourage safe driving, but the data collected through telematics can help drivers understand what skills they can improve. Along with saving money, telematics insurance can help trucking fleets reduce their crash rates by up to 80%.
Disadvantages of pay-how-you-drive insurance
Pay-how-you-drive insurance isn’t suitable for every truck driver or fleet. This type of insurance has a few drawbacks, including higher initial insurance rates and less driver privacy.
Higher initial rates
Implementing this type of insurance is often more expensive at first. It can take a while for the telematics device that records driving behavior to gather enough data to determine your driving ability. In many cases, you will also need to pay to have these devices installed in your trucks. However, safe drivers find that the long-term savings of this insurance outweigh these initial costs.
Not ideal for new drivers
New truck drivers who lack skill and driving experience would not benefit from PAYD insurance. While newer drivers may gain insights from telematic data, it’s unlikely that they’d save money with skill-based insurance.
Less privacy for drivers
PAYD insurance relies on recording driver data such as mileage and behavior through telematics and reporting it to the insurance company. Many drivers have privacy concerns over this data sharing as it results in less privacy. To combat this, some insurers limit the data they collect, and several states have enacted policies requiring tracking practice disclosure.
Get the trucking insurance that’s right for you
If you’re a safe and experienced truck driver, consider a pay-how-you-drive insurance policy. By tracking your driving behavior through telematics, insurance companies can offer fair premiums on commercial trucking insurance. This can help you save money while improving your driving skills.
FAQ
Insurance companies deploy telematics technology to track driver behavior and use the resulting data to determine premiums.
Commercial use refers to using a vehicle to transport goods, tools or people for specific business purposes. Drivers who primarily use their cars and trailers for these purposes need commercial auto or hotshot insurance.
The four most common insurance policies business owners need are liability, property, worker’s comp and commercial auto.
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