Insurance companies are getting into the high-tech business to cut company and client costs. Initially begun by Progressive Insurance, others are seeing the advantages of GPS tracking devices on their insurance clients’ vehicles.

This technology simply involves a GPS system that provides the insurance company with data on your driving patterns. Allstate calls this program “Drive Wise”.

What do GPS tracking and these insurance programs provide? Fleet GPS systems can lower your insurance because data can be extracted to show braking habits, average speed, miles driven, time of day most driving occurs and road/weather/traffic conditions. Insurance companies can then arrive at a score based upon the likelihood you will cost the company money. If your vehicle is already equipped with such built-in, high-tech devices, these can be used as part of the “Drive Safe and Save” initiative.

First proposed for teenage drivers as a way to reassure parents and save on premiums for safe driving of teens, the idea has caught on with insurance companions for drivers of all ages.

Many fleet companies have adopted GPS tracking systems as part of fuel and premium savings, vehicle maintenance, and safe driver rewards. Since all fleet vehicles that use interstate highways must comply with electronic logs by October, 2014 according to MAP-21, going the extra route of fleet GPS tracking systems seems like a natural transition.

Insurance companies point out to their clients that it is simple mathematics: reduced accidents translate to lower insurance premiums. Fleet owners recognize this. The cost of an accident translates to five times that amount in real costs including: driver down time vehicle down time, and increased insurance premiums.

You needn’t think this is entirely altruistic behavior on the part of insurance companies. Improving driver road behavior translates to safer road conditions and lower insurance costs for everybody. Identifying risky driver behavior and correcting it saves everyone.

For fleets, the data for the entire fleet is collected and collated creating for the insuring company an overview known as a “fleet risk portrait”. Data can be shown for each driver and for the entire fleet as a whole. Fleets can then create a plan to retrain drivers, reward low-risk driving behavior and, ultimately, improve their risk portrait so they save on insurance premiums.

Certain insurance companies  have even gone the extra mile and created driver training programs tailored to the issues indicated by the GPS fleet tracking system. GPS is not only monitoring but also trying to make the roads safer.

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