When we survey our clients, we consistently find that commercial auto insurance is one of their top expenses, and is often mentioned as an on-going concern. Even fleets with spotless records as seeing their premiums double or triple in a single year, which begs the question: what is causing these dramatic swings?
The problem facing commercial auto insurance
The answer is complicated but it boils down to this: auto insurance carriers, who actually write the policies, are facing more and more claims due to distracted driving and the ever-increasing payouts awarded by juries for damages, including medical bills.
Which leave the insurance industry with two options: raise their rates, or get rid of risky account (and it turns out they are doing both). That's why, despite your spotless record, you might be hearing from your agent that in order to get your policy re-quoted, you have to install dash cams in your trucks.
This is why it is becoming increasingly common for insurance companies to require commercial vehicles to add dash cams and telematics systems before a policy is renewed. According to Linda Stoppacher of Acadia Insurance, the reasoning behind these new requirements goes far beyond reducing the cost of claims: safety and “building better fleets,” as she phrased it, is the primary goal.
How your rates are calculated
Insurance companies are like a payment plan for accidents, you pay for them one way or another either through premiums and deductibles or paying claims if you are self-insured. There is no universal 'Credit Rating' that insurance carriers can look at to see what your rates are, although some agencies like Insurance Office of America have introduced a Risk Score to help bridge carriers with their clients.
Suffice it to say that if you want to spend less on insurance, you will need to implement risk mitigation strategies like cell phone use policies, driver training and fleet technology such as dash cams.
Introduction to dash cams
Owners have every right to put dash cams in their fleet vehicles, however there are some guidelines you should follow:
- You must disclose dash cam use to drivers
- Don't record audio (avoid wiretapping issues)
- Place 'Dash cam in use' stickers in/on the vehicle
The primary purpose of using a dash cam system is to actively monitor and improve safe driving behavior. Safety managers who use dash cams as a coaching tool get more value out of their investment.
Reducing insurance claims & fraud
Of course, the main thing people think of with dash cams is capturing a digital record of events in case of an accident or safety incident. This digital witness helps protect business owners and allows insurance carriers fend off unwarranted claims.
Utilizing dash cams for commercial trucks are particularly important, since truck drivers often get blamed when accidents occur. However, a recent study by the American Trucking Association shows that in most fatal collisions involving a truck, the cause of the accident is overwhelmingly the fault of the other vehicle.
“Twenty-three percent (23%) of the trucks in fatal crashes were assigned the critical reason [for the crash] while 77% of the critical reason was assigned to the other vehicle.”
With a dash cam installed, the true account of what happened during an accident is revealed and, statistically, this will clear the truck driver of any wrong-doing in most cases.
How dash cams save you money
There are a few ways adding dash cams as part of your risk-mitigation strategy will impact your annual insurance premiums and options for insurance carriers.
Some insurance carriers offer a direct discount for using dash cams in your trucks.
Save on deductibles
Less at-fault accidents means you are paying fewer out-of-pocket deductibles.
Reduced premium increases
Fewer claims means lower (or no) increases to your annual premiums.
More insurance options
Using dash cams allows your insurance agent to find you a lower rate from other carriers.
Do-it-yourself dash cam solution
|Who it is for||
- Tech-savvy users
- Lower up-front capital
- Easily defeated
If you have some experience with technology and are used to setting up and fixing your computers, this might be a good option for you.
It requires more legwork such as becoming familiar with the technology, finding quality components and frequent maintenance checks to ensure the equipment is working.
This becomes less practical with the more vehicles you have, with the added on-going maintenance cost outweighing the savings of going with a commercial solution.
These systems are also consumer-grade and can be prone to failure (see Amazon reviews) and lack any additional benefits for fleet managers like real-time tracking, fuel management, and vehicle maintenance monitoring.
Picking the right memory card
Dash cams record on a loop, with the oldest footage being over-written by the newest. Typically, when the camera detects a safety event like harsh braking, cornering or an accident, the footage surrounding the incident is marked. This marked segment is saved and protected so it isn't over-written and can be retrieved later.
Most dash cams use a microSD for video storage, select an 'endurance' rated card, which is designed to survive many read/write cycles without errors. Memory cards are also rated in speed classes such as Class 10 (C10) which is a common rating, allowing for transfer speeds up to 10 Mb/sec.
Memory card record time
Here is a table with some common recording sizes and bit rates to give you an idea of how many hours of footage you can expect. Again, this varies by manufacturer, so refer to their specifications or user manual.
|Bit rate (GB/hr)||1.3||2.6||1.9||3.8||2.8||5.6|
|Record time (hr)|
You will need to come up with documentation for drivers and staff on the cameras, maintenance procedures (which can be added to a driver's pre-trip inspection) and appoint a manager to be responsible for the system.
Make sure someone knows how the system works, and that the processes to use and maintain it are well documented. This way you aren't left scratching your head how to retrieve footage when your manager takes a vacation.
Commercial dash cam solutions
|Who it is for||
- Tech-savvy users
- Managed system
- Higher upfront investment
A commercial solution will cost more initially than buying consumer-grade cameras, but there are a lot of benefits to going this route.
First off, a commercial system is designed specifically for this task, designed to operate in the harsh automotive environment and is designed to be easily managed.
The system automatically checks to make sure all the cameras are working correctly and report any errors to you. Systems like this come with longer warranties and allow easier budgeting (fixed versus variable cost).
The most significant upside for commercial systems is that they do more than only protection in case of an accident, they help prevent them. The nature of an active system means it calculates your crucial key performance indicators (KPIs) for you. Things like fuel used, idle time, and safety events.
Using these metrics, you can start to track vehicle costs and track how improvements affect your bottom line.
It helps to have a clear idea of the level of support you and your team can expect from your technology vendor. Don't be afraid to ask about their policies, product replacement turnaround time and phone support hours.
Avoid long contracts that you can't get out of if the service doesn't live up to your expectations or what you were sold. There are a lot of choices out there, if there is not flexibility, find a vendor who understands your concerns.
Training & implementation
Check what kind of on-boarding your vendor offers, if it includes staff or driver training and how the system is to be implemented. Some systems require more setup than others, and that helps to know before you buy.
Dash cam implementation
Experience with technology
If you are new to fleet technology, don't be afraid to enlist the help of a consultant who can help negotiate with vendors and ask important questions that you might not think of. Doing this before making an investment leads to a more cohesive solution, rather than a patchwork of various technology and contract dates.
People, roles and responsibilities
Take a little time to determine who is accountable for reviewing the information, who has the authority to act on the info and who is responsible for the correct operation of the system. Depending on your management team, sometimes the person who is accountable also has authority to act.
Is accountable for reviewing the safety events generated by the dash cam system
Has authority over the system, acting on the information found
Are responsible for the proper functioning of the dash cams
Dash cam procedures
It's important to develop a solid set of procedures for your team in order to get the most out of your investment. Creating a routine will keep your system running smoothly and lead to quicker results.
Check for proper operation of the cameras during their pre-trip
Review safety events from the previous day with drivers
Take action on information from the safety manager
Review violations of the safety policy to drivers during a tool-box safety talk, ask drivers what issues they are facing on the road
Review and update risk mitigation policies based on lessons learned and best practices
Update software on dash cam units, inspect overall condition
How to roll out dash cams to drivers
"We approached it as something that will help all of us learn, instead of a punishment or disciplinary tool."
Jerry Wright - Fleet Owner
Here are a few tips if you are concerned about pushback from drivers when rolling out new fleet technology:
|1||Communicate to your team that the dash cams are there to protect drivers from unwarranted claims, which in turn lower your insurance costs|
|2||Position dash cams as a learning tool that enables managers to identify issues that can be addressed at safety meetings with drivers|
|3||Convey that dash cameras are an investment in safety that improves the image of the company in the eyes of the public|
Dash cam training for drivers, staff
If you are using a commercial dash cam system, ask your technology partner if training is included in the rollout, is an additional cost or is not available. Ideally it is part of the on-boarding process to bring your team up to speed quickly and reduce support issues later.
Add a section on dash cams to your vehicle use policy to make it a part of your procedures, and help new drivers get brought up to speed quicker instead of relying upon other drivers to teach them the rules.
Managing a dash cam system
Create your risk mitigation plan that describes how everyone is responsible for using best practices to maintain safety. A good plan will include operational items for your workers, such as wearing high-visibility jackets, using a spotter (or reverse camera) to back up (and how to avoid needing to backup), pre-trip inspections, maintenance procedures, etc.
With unsustainable insurance premiums spreading across the industry, businesses will need to adopt new risk mitigation strategies like driver training and fleet technology. These strategies will also help fleet owners save money in other areas of their operation from fuel savings, higher productivity and increased driver retention.
- Come up with a proactive plan with your insurance agent before your rates increase
- Get your management and drivers on-board by communicating your new risk policies
- Throughly vet your fleet technology parter, especially on product support
- Avoid long term contracts if service doesn't live up to expectations
- Review your risk policies annually and ask drivers, managers and insurance agent for ideas for improvement
Interested in trying out a Carmalink dash cam solution?