The transportation industry and fleets have been faced with insurance premium increases, but underwriters are taking note of safety technology, such as collision mitigation systems and devices that measure and monitor driver performance.
“Underwriters are focused on multiple facets of operations, including investments in advanced collision mitigation technology, telematics/camera systems, critical events reporting, hiring/training protocols, safety management and claims administration,” according to report from Marsh USA Inc., an insurance provider. “Other key underwriting data focus on nature of operations, driver demographics, training, safety, recruitment, and measuring/monitoring of driver performance using event data collected through on-board technologies.”
Chuck Pagesy, director of safety for Penske Truck Leasing, said there is a relationship between safety technology and insurance rates. “Insurers look more favorably on motor carriers that are using technology to make the unit safer and to hold drivers accountable,” he said.
Under federal law, licensed motor carriers must carry at least $750,000 of insurance coverage. The coverage requirement can be as high as $5 million for vehicles with more than a 10,001-pound gross vehicle weight (the combination of tractor, trailer and cargo) and hauling certain types of commodities.
The primary goal for fleets is to avoid having to file a claim to begin with, and when fleets reduce claims, their insurance costs come down. There are several safety technologies that can minimize the risk of an incident.
On the equipment side, disc brakes, collision avoidance systems, lane departure warnings and active cruise control can all improve safety, Pagesy explained. From the driver side, safety can be enhanced with equipment that monitors driver behavior, such as excessive speeds, fast starts or hard-braking episodes. That can be achieved through onboard telematics as well as forward- and driver-facing cameras.
“As the applications become more common and the technology is less exotic, the manufacturers are gaining some economies of scale savings and lowering their prices,” Pagesy said, adding that Penske Truck Leasing works with customers to identify the equipment and safety features that will help them reach their goals.
Pagesy noted that if companies invest in technology that tracks driver behavior, they need to monitor it and address it with drivers. Knowingly allowing a driver to operate in an unsafe manner could increase a fleet’s liability if an accident occurs. “You’re better off not putting it on board if you aren’t going to have follow-up, accountability and, ultimately, progressive discipline,” he said.
Drivers are getting more and more used to having safety technology on board, and Pagesy said very few drivers tend to quit because of it. “Good drivers will embrace it, and you really don’t want bad drivers in your fleet,” he said.