Any individual or business that is involved in the private hire industry will require insurance. Private hire refers to vehicles and drivers that are booked ahead of time to ferry passengers or goods. Therefore, drivers working for rideshare companies require private hire insurance. Taxi cab businesses also need private hire insurance for their drivers.
Private hire insurance protects against accidents and theft. It helps to compensate drivers when their cars are damaged through no fault of their own. However, private hire vehicle insurance can be expensive.
This is where telematics helps. Telematics is being used to lower insurance costs and increase vehicle efficiency.
What does private hire insurance refer to?
As briefly mentioned above, private hire insurance is required for certain commercial driving activities. Hackney cab drivers who pick up passengers in the street need public hire insurance. But, those taxi drivers that are booked by phone or through an app require private hire insurance.
Because there are now many people making a living in the private hire sector, insurance cover has become more specific. For example, tailored Uber insurance exists for drivers operating for this rideshare company. And food delivery drivers can also find insurance for their specific role.
To help make this type of insurance more affordable, and fair, telematics have been introduced.
What exactly is telematics?
Telematics is a type of technology that is used to monitor and record data regarding a driver’s behavior. This data is transmitted to a server so that insurance companies may analyze it and determine if the driver is a high risk or safe.
Information gathered typically includes speed, acceleration, braking, cornering, and location. The data is assessed to see how a driver behaves when on the road. Some drivers are cautious while others brake sharply and corner at speed.
The data collected is used to calculate a score to determine what sort of risk the driver presents.
Telematics with private hire insurance
Telematics is becoming increasingly common in the insurance industry. It is especially useful for private hire drivers as it helps them to save money. Any business that wishes to be more efficient needs to cut costs and reduce downtime. Telematics-based private hire insurance will help certain businesses achieve this.
How does telematics help drivers and businesses save money?
Telematics helps individual drivers such as those working for taxi businesses to save money. This technology may also help fleet services run more efficiently.
Telematics-based insurance rewards safe driving. So, careful drivers can expect lower premiums. This aids private hire drivers and businesses involved in this industry. It also helps insurance companies.
Here are some of the ways that private hire insurance with telematics is helping businesses to be more efficient, and drivers to save money.
Reduced number of claims
Telematics helps drivers to learn better habits on the road. The feedback given from the insurance company should lead to drivers understanding their weaknesses and improving their driving behaviors.
In turn, this will result in fewer accidents and claims. Between January and the end of March, 599,000 insurance claims were settled. This represented a 14% rise over the same quarter in 2022.
If insurance claims drop then premiums will also become more affordable. Insurance companies benefit from fewer claims, and in turn, so will drivers.
Insurance policies are more flexible
Many private hire taxi drivers work independently. In a way, taxi drivers run their own businesses and telematics helps them to be more efficient.
Usage-based insurance using telematics allows for customized insurance policies. Insurance providers can be more flexible with their policies when telematics are used. Drivers are benefiting from only paying for the coverage they need.
Incentives for safe driving
Not needing to know what to do after a car accident should be incentive enough to be a safe driver. But, insurance providers are using telematics to offer further incentives to private hire drivers.
When safe driving behaviors are exhibited insurance premiums will drop. And some insurance companies are also offering fuel discounts, cash rewards, and cheaper vehicle maintenance. Businesses and individuals save money here.
Improved fuel efficiency
One way that businesses that operate fleets of vehicles can become more efficient is through saving fuel. The price of fuel has been dropping since July 2022’s high. But, fuel represents a considerable part of any business that involves commercial driving.
Telematics helps drivers to operate vehicles in a manner that improves fuel efficiency. The technology also encourages driving styles that put less pressure on vehicles in general.
Less need for repairs and replacement parts
Defensive driving, a reduced need for sharp braking, and smoother cornering will lead to less wear and tear. Cars will therefore require fewer repairs and replacement parts.
Businesses operating car lease deals will benefit from a longer life span for their vehicles. Fleets will need less servicing. And taxi drivers will pay out less frequently for new parts.
More transparency with insurance cover
Instead of relying on traditional metrics to calculate insurance premiums, telematics gives more transparency for pricing. A driver or business owner may see how their risk level is calculated.
Car insurance premiums have usually been judged on occupation and age and other factors. But, there was less onus on safe driving. Now, drivers know exactly where they need to improve their skills to lower their premiums.
What other benefits does telematics bring in general?
Telematics helps to lower private hire insurance premiums. This can benefit Uber drivers, private hire taxis, delivery drivers, and couriers. But, there are some other benefits that telematics bring not just to insurance holders but to vehicle owners and other drivers.
Safer driving and safer roads
Telematics may ultimately help to improve road safety. This is good news for pedestrians and other drivers in general.
With the incentive of cheaper car insurance, there is good reason for drivers to learn better road habits. The data produced by telematics-based car insurance can help all drivers regardless of profession to improve their driving skills.
Early detection of problems
Telematics devices transmit data relating to how a car is being driven. But, they can also send data relating to the performance of a vehicle. This helps to spot problems early and could save money by preventing serious issues later on.
Understanding how to deal with a breakdown is sometimes necessary for drivers. Yet, telematics could reduce the chances of this happening.
Preventative maintenance helps drivers and associated businesses to operate more efficiently. Telematics can be used to identify when cars need servicing, and oil changes. Less time will be spent on servicing as telematics will relay information about air filters and fluid levels.
The data being transmitted by telematics is analyzed by insurers to calculate risk. However, fleet operators can use telematics to monitor individual drivers in real-time and assess their performance.
Telematics combined with private hire insurance provides a way for businesses to improve driving performance while saving money. Vehicles will experience less wear and tear, fuel efficiency will improve, and insurance premiums will drop. Of course, drivers need to take notice of driving reports from insurers to get all the benefits that telematics brings.
But, private hire drivers face expenses to keep their cars on the road. Telematics helps vehicles have a longer life and reduces the need for repairs. Private hire vehicles will run more efficiently, and thus make more money.