Central Insurance Blog

Data is changing the future of commercial auto insurance, and telematics is in the driver’s seat. 

Once seen as a luxury reserved for large fleets, telematics systems have become a vital risk management tool across various industries, helping businesses lower costs, reduce claims, and make more informed decisions. But what exactly is telematics, and why does it matter so much for your insurance?

In this article, Central’s Director of Transportation Underwriting, Jason McConkey, shares how telematics is reshaping underwriting, improving safety, and redefining claims management.

What is Commercial Auto Telematics?

Telematics systems typically include three components: vehicle sensors, GPS tracking, and in-cab cameras. Together, they collect and transmit real-time data about vehicle performance, location, and driver behavior, such as:

• Sensors monitor high-risk actions like hard braking, sharp turning, and rapid acceleration, which are key indicators of accident potential.
   
• GPS tracking lets fleet managers see vehicle locations, speed, and route compliance.
   
• Cameras, especially front- and inward-facing ones, provide valuable footage that can defend drivers or clarify liability in the event of a crash.

Why Commercial Auto Telematics Matters to Insurers

The insurance benefits of telematics aren’t just theoretical. The data helps carriers defend their insureds after accidents, identify trends in risky driving behavior, and offer more tailored commercial auto insurance pricing over time. In fact, 72% of fleets report combining training and telematics has reduced crashes and/or claims.

Forward-facing and inward-facing cameras, in particular, have become a powerful asset in claims resolution. “If someone blames your driver for an accident and the footage shows otherwise, you can avoid a large claim entirely,” McConkey explains, “That’s the dream scenario.”

Even when drivers are at fault, clear video evidence allows for faster resolution, helping insurers avoid prolonged legal battles and reduce industry-wide costs.

Commercial Auto Telematics Adoption is Accelerating

Thanks to falling technology costs and rising awareness, 82% of commercial policyholders have some telematics adoption, up from 65% in 2023. Telematics is now nearly universal in the transportation and logistics industries and is gaining traction in construction and service fleets as well.

While a single truck owner may benefit primarily from camera footage, fleets of three or more see real gains in logistics, coaching, theft prevention, and operational efficiency due to commercial auto telematics systems.

Can Commercial Auto Telematics Lower Your Insurance Premium?

Commercial auto telematics won’t instantly slash your premiums—but it could favorably influence your commercial auto pricing over time.

“Commercial Insurance isn’t a grocery store coupon,” Jason quips. “You’re not going to get 10% off just for having telematics installed. But insurers do see it as a favorable risk characteristic.”

Learn More: The Best Fleet Management Software to Protect Your Insurance Rates

When fleets actively use telematics data to coach drivers and reduce accidents, that improvement eventually shows up in their loss history, and that’s where the savings really start. There is a clear reduction in risk after integrating telematics and training into a holistic risk management program — improving risk profiles by 26% in the first six months. 

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Commercial Auto Telematics Adds Business Value Beyond Premiums

Beyond potential insurance benefits, telematics helps businesses improve overall performance. By reducing behaviors known to spike fuel consumption like harsh acceleration, braking, and excessive idling, companies can extend vehicle lifespan, lower fuel usage, and minimize maintenance needs.

McConkey highlights that AI-powered systems even offer in-cab coaching, alerting drivers in real time when they exhibit risky behaviors like using a phone or following too closely. While the technology isn’t perfect, these features represent a shift toward smarter, safer driving environments.

What the Future of Commercial Auto Telematics Holds

Over the next five years, McConkey sees commercial auto telematics becoming more integral to the insurance process. As usage spreads, insurers may incorporate telematics data earlier in the underwriting process, enabling more dynamic pricing and real-time risk assessment.

One hurdle still facing the telematics industry? Lack of standardization. 

“Right now, each platform has its own way of measuring and scoring drivers,” he explains. “That makes it hard to compare risk across systems. Greater consistency would go a long way toward unlocking the full potential of this data.”

Additionally, driver-assist technologies are on the rise, and telematics could help prove whether a driver or the vehicle automation system was at fault in an incident.

Is Telematics Right for Your Business?

If you manage a commercial fleet of any size, implementing telematics into your fleet management is worth considering. Even a one-truck owner can benefit from basic camera systems to defend against false claims. For larger fleets, telematics becomes a powerful tool for visibility, training, and protection.

McConkey stresses one key point: You have to use the data. 

“A telematics system that just sits there without being used for coaching or review? It’s not doing you much good.”

The Central Difference

Not all insurers approach telematics the same way, and Central Insurance is committed to staying ahead of the curve. Our balanced, customer-first approach to technology in commercial auto insurance sets us apart from other carriers, as we care about the impact to your operations. Central views commercial auto telematics as a collaborative tool to empower businesses, reduce claims, and create safer roads.

Central works closely with its agents and policyholders to understand your operations and how you’re using telematics—because that truly impacts risk. With a strong emphasis on service, integrity, and relationships, Central Insurance is uniquely positioned to help businesses like yours integrate telematics in a way that makes sense—for underwriting and long-term success.

Contact your local independent Central agent for more details about commercial auto insurance or to get started with a quote.