Tracking System Insurance: Vehicle Protection

Vehicle tracking systems are now commonly requested by insurance providers to monitor driving behaviour and vehicle location. These tracking devices are either plugged into the car's onboard diagnostics or downloaded as a smartphone app. They monitor driving habits such as speed, acceleration, braking, mileage, and time of day, and the data is then sent to the insurance company. This allows insurers to offer discounts to safe drivers or those who are not on the road often, as well as helping to combat insurance fraud. In addition, GPS tracking systems can help locate stolen vehicles, further reducing costs for insurance companies and encouraging them to offer discounts to customers who install tracking devices.

How vehicle tracking systems help reduce insurance costs

Vehicle tracking systems can help reduce insurance costs in several ways. Firstly, they can provide evidence of safe driving habits, such as obeying speed limits, smooth acceleration, and gentle braking. This data can be used to demonstrate low-risk driving behaviour, which insurers reward with discounted premiums. The presence of a tracking device also encourages safer driving, as drivers are aware of the monitoring and the potential consequences of reckless driving.

Secondly, vehicle tracking systems help in recovering stolen vehicles. The tracking devices act as a deterrent to thieves, as they know the chances of being caught are higher with a tracker installed. Even if a vehicle is stolen, the tracking system enables prompt recovery, reducing the financial burden on insurance companies. This reduced risk of theft can lead to lower insurance premiums for vehicle owners.

Thirdly, vehicle tracking systems can help insurance companies combat fraudulent claims. By analysing data such as speed, braking patterns, and location, insurers can identify false claims and protect themselves from financial losses. This, in turn, can help control auto insurance prices for all customers.

Additionally, vehicle tracking systems aid in maintaining proper vehicle maintenance. They provide real-time alerts for routine maintenance and predict vehicle maintenance needs, reducing the risk of accidents due to mechanical failures. This proactive maintenance improves road safety and can lead to insurance discounts.

Finally, vehicle tracking discourages the misuse of fleet vehicles for personal use. When employees are aware that their location and mileage are being monitored, they are less likely to use company vehicles for unauthorised purposes. This reduces the chances of accidents and lowers insurance costs for the business.

The types of vehicle tracking systems recognised by insurance companies

Vehicle tracking systems are becoming increasingly common in the insurance industry, with some insurers even insisting that vehicles are fitted with a tracker before they will provide cover. These tracking systems are recognised by insurance companies as they help to reduce the cost of insurance policies and increase the recovery rate of stolen vehicles.

There are two main types of vehicle tracking systems recognised by insurance companies: physical telematics devices and smartphone applications. Physical telematics devices, also known as dongles, are installed or plugged into a vehicle's onboard diagnostic (OBD) port, which is usually found beneath the steering wheel. They collect data about driving habits, including speed, braking, distance driven, time of day, and phone usage. This information is then used by insurers to adjust premiums and offer discounts to safe drivers.

On the other hand, smartphone applications can be downloaded onto a driver's phone and synced with their vehicle. While these apps may not have direct access to information from the vehicle's OBD port, they can still detect behaviours such as sudden acceleration and hard braking. Smartphone apps often include a dashboard that allows drivers to monitor their driving habits and make improvements to increase safety and potentially reduce their insurance rates.

In addition to these two main types of vehicle tracking systems, there are also passive and active tracking devices. Passive devices store information such as GPS location, speed, heading, and trigger events, such as key on/off or door open/closed. The data is then downloaded and evaluated once the vehicle returns to a predetermined point. Active devices transmit data in near-real time via cellular or satellite networks. Many modern vehicle tracking devices combine both active and passive tracking abilities, utilising cellular networks when available and storing data internally when a network is not accessible.

Furthermore, insurance-approved vehicle trackers can be categorised as either Cat 7 or Cat 5 by the insurance industry body, Thatcham. These trackers must include a location tracking system, such as GPS or VHF, and are monitored by a remote security centre to ensure an instant response to theft. Thatcham-approved trackers also have multiple installation locations and tamper alerts to minimise the chance of interception by thieves.

Overall, vehicle tracking systems recognised by insurance companies aim to provide data on driving habits, deter theft, and ensure quick and effective vehicle recovery in case of theft.

How vehicle tracking systems help prevent vehicle theft

Vehicle tracking systems are an effective way to prevent vehicle theft and aid in the recovery of stolen vehicles. Here are some ways in which vehicle tracking systems help prevent vehicle theft:

Deterring Thieves

Vehicle tracking systems can deter thieves by making it more difficult to steal a car. Top-of-the-range car trackers have built-in immobilizers that prevent the engine from running, thus stopping the car from being taken. Additionally, the presence of a visible theft-deterrent system, such as a steering wheel lock, can also deter potential thieves.

Real-Time Location Tracking

Vehicle tracking systems that utilize GPS technology provide real-time location data, enabling police and in-house repatriation teams to track and recover stolen vehicles quickly, often within hours. This timely recovery saves owners from prolonged stress and anxiety.

Identifying Thieves

In the event that a stolen car is recovered, vehicle tracking systems can assist law enforcement by providing information about the thief, such as their location and driving patterns. This information can lead to the identification and apprehension of the perpetrator(s), potentially reducing vehicle theft in the wider community.

Early Warning Systems

Vehicle tracking systems with early warning features can help keep drivers safe during carjackings and breakdowns. For example, alerts can be set to notify fleet managers immediately if a vehicle is turned on or moved outside of a defined operating perimeter. This enables prompt notification of local law enforcement, increasing the likelihood of catching the crime in progress.

Insurance Benefits

The presence of a vehicle tracking system can result in insurance benefits for vehicle owners. Insurance companies often offer discounts on the comprehensive portion of policies for vehicles equipped with tracking systems, as the loss risk of the vehicle is significantly reduced.

How vehicle tracking systems improve driving behaviour

Vehicle tracking systems can improve driving behaviour in several ways. Firstly, they provide data and insights that help identify areas for improvement. This includes monitoring driving habits such as speed, acceleration, braking, cornering, and idling. By tracking these parameters, fleet managers can identify aggressive or unsafe driving practices that increase the risk of accidents and higher maintenance costs. For example, harsh braking and acceleration can lead to higher fuel consumption and increased wear and tear on vehicle components.

Secondly, vehicle tracking systems enable customised driver training and coaching. With data-backed insights, managers can develop targeted training programmes to address specific driving habits for individual drivers or groups. This can include analysing trends and patterns in driving behaviour over time, allowing for more effective instruction.

Thirdly, vehicle tracking systems promote accountability and competitiveness among drivers. Knowing that their performance is being tracked and analysed encourages drivers to adopt healthier driving practices. The introduction of driver scorecards and leaderboards can foster a sense of competition, motivating drivers to improve their skills and strive for better scores.

Additionally, vehicle tracking systems help improve overall fleet safety and reduce operational costs. By curbing unsafe driving behaviours, such as speeding or abrupt manoeuvres, the risk of accidents decreases, leading to fewer vehicle repairs, lower insurance claims, and enhanced driver safety. This also contributes to maintaining a positive brand reputation and customer satisfaction.

Furthermore, vehicle tracking systems assist in optimising fuel consumption and reducing carbon emissions. By identifying inefficient driving habits, such as excessive idling or harsh acceleration, fleet managers can implement eco-driving practices that not only reduce fuel costs but also contribute to environmental sustainability.

Lastly, vehicle tracking systems enable real-time visibility and instant violation alerts. Managers can monitor driver activities as they occur and receive alerts for any unsafe or prohibited behaviour. This allows for prompt corrective action, reducing the likelihood of accidents and improving overall fleet performance.

In summary, vehicle tracking systems improve driving behaviour by providing data-driven insights, enabling customised training, fostering accountability and competition, enhancing safety, optimising fuel efficiency, and offering real-time visibility for proactive decision-making.

The privacy concerns of vehicle tracking systems

The use of vehicle tracking systems by companies to monitor their fleets has raised questions about the privacy of drivers. While these systems can help businesses coordinate their fleets more effectively, boost efficiency, and cut costs, they also collect vast amounts of data, including GPS data, dashcam footage, and fuel consumption, which raises ethical and legal concerns.

Legitimate Concerns

Employees' privacy concerns are legitimate, especially when they use company vehicles for personal purposes outside of work hours. Employees expect absolute privacy during personal time, and companies generally have no right to know where employees go during their lunch breaks, for example. Privacy concerns are further exacerbated when many people within a large organisation have access to an employee's data.

Unions and Legal Action

Unions have expressed concerns about the use of vehicle tracking systems, and in some cases, these concerns have led to legal action. For instance, in Australia, the Transport Workers' Union tried to prevent a logistics company from installing driver-facing and road-facing cameras in its trucks. While the union lost the case, and the company was allowed to install the cameras, the implementation was accompanied by employee training and the drafting of usage guidelines.

Privacy Policies and Communication

To address privacy concerns, companies should have a clearly defined and transparent privacy policy that is communicated to employees in writing, using clear and easily understandable language. This policy should detail the type of data being collected, how it is stored, protected, and used, as well as any legal justifications for the tracking. Being transparent about the equipment installed in vehicles is also important, even if the devices are designed to be hidden.

Legal Obligations

It is crucial for companies to stay up to date with privacy laws and regulations, such as GDPR, which can vary across different countries and states. In many countries, there are strict laws surrounding the tracking of drivers and their vehicles, requiring companies to inform drivers before tracking them. Consulting legal experts to ensure compliance with relevant laws is advisable.

Choosing the Right Technology

Certain vehicle tracking systems are better designed to protect privacy. For example, some software includes features that allow drivers to switch between private and business trips, giving them more control over their privacy.

Balancing Privacy and Business Needs

While privacy concerns are important, they should not prevent companies from implementing fleet management software. Instead, companies should understand their employees' concerns and create robust policies that involve driver input. Companies should also emphasise that the purpose of the tracking software is not to invade employees' privacy but to protect company assets, improve safety, and meet regulatory obligations.

Frequently asked questions