How Insurers Use Telematics Data to Reward Safer Drivers and Lower Rates

Telematics, dashcams and connected-vehicle data are reshaping how trucking insurers underwrite risk, price policies and pay claims across the United States. For carriers operating in high-density hubs — Los Angeles/Long Beach, Chicago, Dallas–Fort Worth and Houston — telematics-enabled underwriting and pay-how-you-drive (PHYD) programs are no longer optional: they directly influence premium cost, loss control and carrier competitiveness.

What telematics data insurers care about

Insurers and risk managers extract structured signals from raw vehicle data to quantify driving behavior and exposure. Key telemetry and in-cab signals include:

• Hard braking, acceleration and cornering (g-force events)
• Speeding relative to posted limits and road type
• Hours-of-service / engine-on exposure and idle time
• Miles driven (odometer / GPS) — pay-per-mile and exposure models
• Seat-belt use and driver distraction alerts
• Video / dashcam incidents: forward-facing and driver-facing clips
• Geofence events: high-risk locations (ports, urban corridors)

Insurers combine these with telematics-derived KPIs (e.g., safety score, risky-event frequency per 100k miles) to segment fleets and price policies dynamically.

How insurers translate telematics into lower premiums

Insurers use telematics data across three commercial levers to reward safer drivers:

1. Underwriting segmentation and pricing

   • Replace blunt class codes with behavior-driven risk tiers. Fleets with low risky-event rates are placed in lower-priced tiers.
   • Underwriters use telematics history (30–90 days) to set renewal pricing and credit safety investments.

2. Usage-based & pay-how-you-drive (PHYD) programs

   • PHYD ties premium adjustments to measured driving performance (not just claims history). Typical program mechanics:
     • Baseline policy + monthly telematics audit → safety credits or surcharges.
     • Pay-per-mile riders for low-mileage or regional fleets.
   • Carriers with sustained low-risk telematics profiles commonly receive safety credits or premium reductions at renewal.

3. Claims mitigation & faster FNOL

   • Video-backed FNOL (first notice of loss) and automated event detection reduce adjudication time and claims leakage — insurers pass savings back through lower rates and smaller experience modifiers.

Typical savings & ROI (what fleets can expect)

While results vary by fleet type, region and program design, industry experience points to realistic ranges:

• Telematics hardware and subscription: $100–$400 one-time device cost per vehicle; $15–$60 per vehicle per month for fleet telematics + video plans (pricing varies by provider and feature set). See vendor pricing examples below.
• Expected insurance premium reductions: 5%–20% for carriers that consistently demonstrate improved telematics KPIs; larger reductions (up to 25–30%) are possible in targeted programs combining coaching, dashcams and performance-based underwriting.
• Claims frequency and severity improvements: Many fleets report 10%–30% reductions in crash frequency and substantial decreases in litigation/settlement costs where high-quality video reduces liability disputes.

Sources and vendor pricing references:

• Samsara pricing and product overview: https://www.samsara.com/pricing
• Motive (formerly KeepTruckin) pricing: https://gomotive.com/pricing
• U.S. crash and safety statistics (FMCSA): https://www.fmcsa.dot.gov/safety/data-and-statistics

Telemetry vendor comparison (summary)

*Ranges reflect broad market pricing; contact vendors for exact quotes based on camera, gateway and analytics tiers.

Underwriting models: Pay-per-mile vs. Pay-how-you-drive (PHYD)

• Pay-per-mile: Premium proportional to recorded miles (preferred for regional/short-haul fleets and owner-operators). Reduces cost for lower-exposure operators in Texas or intermodal drayage at LA/Long Beach.
• Pay-how-you-drive (PHYD): Performance-based rating using safety scores. Typical PHYD elements:
  • Composite safety score (weighted events)
  • Monthly or quarterly adjustments
  • Incentive credits for proactive safety programs (coaching, remedial training)

PHYD is becoming common in national programs offered by progressive commercial insurers and specialty trucking insurers. It allows carriers in high-traffic corridors (I-10, I-5, I-35) to demonstrate safer operations and negotiate better renewals.

Dashcams and video: the multiplier effect

Video data is the multiplier that turns telematics from predictive data into defensible evidence. Insurers use in-cab and forward-facing video to:

• Reduce false liability claims and lower settlement payouts
• Accelerate claims adjudication and subrogation recoveries
• Target driver coaching to recorded risky behaviors

Studies and insurer case studies in urban lanes like Los Angeles–Long Beach show shorter claims cycle times and lower litigation rates where video-equipped fleets submit event clips at FNOL.

See more on video and claims: Dashcams, Video and Claims: Using In-Cab Footage to Reduce Liability and Speed Settlements

Implementation at scale: data governance, privacy and consent

Large fleets must balance data utility with compliance and driver privacy:

• Create a data governance policy covering retention, access controls, and redaction of sensitive data.
• Federal/state considerations: while federal motor carrier safety regs apply to safety-critical data, several states (e.g., California, New York) have additional privacy or workplace monitoring protections — counsel should review local laws for driver-facing video.
• Designed-in anonymization: aggregate safety scores for underwriting while limiting individual-level exposure unless needed for coaching or claims.

See recommended implementation practices: Implementing Telematics at Scale: Data Governance, Retention and Privacy for Fleets

Practical steps for carriers (US-focused)

1. Pilot in a single operation hub (e.g., a Los Angeles drayage yard or Dallas regional fleet) for 90 days.
2. Deploy dual sensors: a gateway + forward-facing camera to get both exposure and validation.
3. Share anonymized safety KPIs with your insurer monthly. Negotiate explicit credit bands tied to safety score thresholds.
4. Implement coaching workflows and tie rewards to measured improvement.
5. Track ROI: premium credits + reduced claims costs vs. hardware/subscription and program admin.

For PHYD program design, see: Pay-How-You-Drive Programs for Carriers: UBI Models That Impact Trucking Insurance Premiums

Choosing vendors & what underwriters want

Underwriters prioritize reliable, tamper-resistant data and vendor stability. When comparing vendors, focus on:

• Data fidelity and timestamp accuracy
• Video resolution, event capture and cloud retention options
• Integration with insurer portals and FNOL workflows
• APIs, export formats and evidence-chain protections

For deeper guidance on turning telemetry into actionable KPIs, see: From Raw Data to Action: KPIs and Dashboards That Translate Telematics into Insurance Savings

Final considerations for U.S. fleets

Telematics is a commercial differentiator in U.S. trucking insurance markets. Fleets operating in high-exposure corridors (Los Angeles ports, Chicago intermodal hubs or Texas long-haul lanes) will find the fastest return where telematics is paired with active coaching, dashcam verification and a clear insurer credit path. Vendor selection, transparent data governance and early insurer engagement are the three pillars that determine whether telematics becomes a cost center or a driver of measurable premium reduction.

Further reading and related topics:

• Telematics and Trucking and Logistics Insurance: How Data Is Changing Underwriting