GPS Fleet Tracking Can Save Your Company a Truckload in Premiums and More

Just about every industry suffered during the worst of the Recession, but the construction industry was one of the hardest hit. For construction companies and contractors it's still rough going, and without much power to increase the amount of construction work out there, many of those companies have been looking for ways to keep costs down. Increasingly, they're finding that installing GPS in their vehicles might seem like a big expense, but is actually one of the most effective ways to save money - on fuel, repairs, labor costs, and especially insurance premiums.

One of those companies was a Massachusetts-based roofing and sheet metal provider, with construction vehicles on the roads in New England, New York, and New Jersey. In this case, the main goal was to use the GPS's "start/stop" function to cut down on discrepancies between the hours their employees were working, and the hours they were reporting on their time cards. Installing the system was pricey, but well worth it: the company quickly saw that they were saving tens of thousands of dollars thanks to the "start/stop" function alone, and realized ROI in just two months.

GPS tracking in the company's fleet continued to more than pay for itself. With speed information, they were able to keep track of how safely - or dangerously - each driver was driving, and soon saw a 90% decrease in speeding incidents.

They also saw a significant decrease in their insurance premiums. A recent study in California found that a driver with just one speeding ticket in a three-year period had a 50% higher chance of getting into an accident - and 100% higher with two or more tickets. Insurance companies have been using speed violation information to calculate vehicle premiums for years, and that includes company vehicles. Many insurance companies will even reward customers for not speeding. When that roofing and sheet metal provider cut its drivers' speeding by 90%, it meant huge savings on insuring their fleet.

For a company that uses anywhere from one to hundreds of vehicles, GPS has other benefits beyond keeping track of employees. A stolen vehicle is often impossible to track down, and low-priority for police as a result. But a stolen vehicle with GPS is easily recovered, saving a company a lot of trouble, not to mention an insurance claim. The mileage information collected by a GPS also makes it easier to keep track of maintenance, fueling, and other factors for keeping a fleet running smoothly, efficiently, and without anything falling apart.

That's why installing GPS in your company's fleet can reduce premiums by anywhere from 5% to 33%. In many states, the anti-theft function alone can get you a government-mandated premium reduction - although that hardly seems necessary, since both companies and insurers reap the rewards of GPS fleet tracking.

The price of installing GPS in your business' fleet might seem steep, but it could be more than worth it. Ask us how much you could save, then look at the cost of a system. We think you'll like how the equation turns out.

Back on the first day of 2013, most states made a change to the way workers' compensation insurance premiums are calculated. It was the first change in two decades, but hopefully you barely noticed - your premiums stayed about the same, or lowered slightly.

In some states like Massachusetts, where rate hikes haven't occurred in years, companies with fewer claims will benefit, while others with poorer safety records may be seeing significant rate increases.

Many states are now in the second year of the three-year phasing-in of an adjustment to the number used by the National Council on Compensation Insurance (NCCI), which helps set workers comp rates in 38 states.

That change has to do with the experience modifier, a formula to adjust premium rates based on previous losses experienced by a company. This formula uses something called a split point, where the portion of the claim under the split point gets more weight. For the last two decades, the split point was $5,000, so the first $5,000 of a sprained ankle claim, for example, is counted in full while the "excess" loss beyond $5,000 would only receive partial weight in the calculation.

But in the last 20 years the combined forces of inflation, and the massive increase in healthcare costs, have made a $5,000 split point look pretty low. So, the NCCI began phasing in a higher split-point: $10,000 in 2013, $13,500 in 2014, and finishing off at $15,000 in 2015.

What does that mean for your company?

As a result of the recalculations, companies with good safety practices and lower ex mod ratings will gain the fair credits they deserve, while companies with more frequent claims will be hit with unpleasant increases.

We can help you figure out what your premiums will look like through, and after, this change, so that you can handle it like the opportunity it really is. Ask your agent about specific measures for your operation and consider these initiatives:

• Focus on reducing claims by implementing strong safety practices that work

• Promote the use of modified-duty programs as soon as workers can return to the job  

• Review loss and claims data to make sure ex mod and work comp classifications are accurate

• Form safety committees to foster a safer work environment

• Adapt a return-to-work program that will reduce employees' time off the job and curtail costs

• Report claims quickly. Delayed claims reporting allows untreated injuries to worsen, while prompt reporting speeds up treatment and employees' recover time.

• Support a strong safety-training program. Less experienced employees account for a disproportionately large portion of claims. Good safety-training programs can offset this trend.