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GPS fleet tracking: 5 ways to reduce your insurance

Posted May 24, 2023


A GPS vehicle tracking system has become an essential feature for company vehicles. Fortunately, today’s tracking technologies are affordable and easy to install, making it easier for small businesses to implement a tracking system. Here are some benefits GPS tracking offers:

  • Reduce unauthorized vehicle use
  • Control and reduce fuel costs
  • Easily organize, manage, and optimize route stops (job, deliveries, etc.)
  • Provide visibility on fleet activity to back office dispatchers
  • Improve vehicle security (or recovery of stolen vehicles)
  • Automate reporting of mileage, engine hours, driving hours, and time at job site

This list leaves out one important detail: tracking technologies reduce auto insurance premiums.

Explore further with our "Why insurance companies love GPS tracking" Infographic.

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5 reasons why insurance companies love GPS tracking

While improving the operational efficiency of your business with vehicle maintenance tools and driver controls, fleet GPS tracking also helps prevent fleet vehicle theft. Another useful aspect of GPS tracking: When your drivers know there are tracking devices on your vehicles, studies show they drive more responsibly. The vehicle maintenance tools that come with GPS tracking help keep your fleet most efficient and safe on the road as well. Insurance companies provide discounts to fleet managers who use GPS tracking on their vehicles for these reasons. Many major insurers offer discounts of upwards of 30 percent on insurance costs to businesses that implement tracking solutions.

Some insurers may even pay you to implement GPS tracking technology for your fleet. To gain context and learn why insurers care about GPS tracking, consider these five reasons GPS tracking lowers commercial auto insurance rates:

1. GPS tracking lowers the chance of claims due to vehicle theft

By installing a recovery tracker like a fleet management tracking device, you can increase the likelihood of recovering your vehicles in the case of theft. Choosing to implement this added precaution against theft will save you money on insurance premiums.

In 2022 multiple states reported an increase in vehicle theft. According to Car & Driver magazine, thefts were up 88% in Washington and 31% in New Jersey. A report from the Insurance Information Institute showed that an alarming 810,400 vehicles were stolen in 2020, an 11.8% jump from 2019 and the highest since 2008. In 2020 and 2021, the cost of stolen vehicles in the United States was about $6 billion annually.

Most drivers today use a GPS, or Global Positioning System, to get directed from location to location. A commercial tracking GPS system, while providing that navigational functionality, also allows businesses to track their fleet and send that data to a central tracking portal in real time. If your vehicles are equipped with a telematics system with GPS tracking, those fleet vehicles can easily be tracked in the case of theft, improving the ability and the speed with which you can recover a stolen vehicle. Without GPS tracking it can take police weeks to hunt down stolen vehicles. In many cases, the vehicle is never recovered and the insurance company pays out a large claim. This is why so many insurers offer anti-theft device discounts. Improving a business’s ability to reduce theft and recover stolen vehicles will reduce your insurance premiums.

2. Use of GPS tracking tools on your vehicles results in improved driving behavior

Drivers who know they’re being monitored by GPS tracking devices are safer drivers. Telematics data from your fleet vehicles on speeding, rapid acceleration, harsh braking, and sharp cornering are transmitted back to insurers. You can then use this data to coach your drivers on safer driving behaviors. This reduces insurance costs while at the same time reducing fuel costs. According to Forbes, drivers insured through GPS vehicle tracking get into fewer accidents—a 20 percent reduction by some calculations.

In fact, National Public Radio recently reported on an experiment funded by the National Highway Traffic Safety Administration, where researchers found that drivers with a GPS tracking system installed in their vehicle slowed down dramatically when they were promised a $25 prize at the end of each week of safe driving. GPS equipment was installed in vehicles and drivers were dinged every time they went above the speed limit.

Arming your fleet of vehicles with GPS devices will encourage driver safety, improve driving behavior, and reduce your insurance costs as a result.

3. GPS tracking on your vehicles discourages misuse of your fleet of trucks

The use of a GPS tracking device also discourages employees from using company vehicles for personal use. If they know their car or truck is being monitored for location and miles driven, the driver will be more cautious about where and when they drive the company vehicle. Insurers know that the more a vehicle is driven, the higher the chances of any type of accident. This advantage to GPS use lowers insurance costs as well as fuel costs.

Additionally, GPS tracking provides fleet managers ways to encourage drivers to use the most efficient routes available, saving vehicle wear and tear and gas costs. The WEX fleet trackers are active, meaning they provide real-time positioning on the globe, allowing business owners to monitor vehicle locations and movements any time. Understanding where your fleet cars or trucks are at any time can help you develop business routes and make changes to driver routes more strategically. By understanding traffic patterns and road conditions, businesses can dispatch drivers to take more efficient routes. All these savings improve a company’s bottom line and provide better customer service. Insurers are aware of how providing this kind of guidance to drivers makes for a better driver for them to insure.

4. GPS tracking tools encourage proper and timely vehicle maintenance

With GPS tracking you can track routine fleet vehicle maintenance with a tool called Service Report. Vehicle maintenance needs can be predicted with this technology, providing fleet managers with an added maintenance tool. A vehicle that suffers a tire blowout or other mechanical malfunction is more likely to cause an accident. GPS tracking sends out real-time alerts for when vehicle maintenance is required, helping you prevent these kinds of incidents. With Service Report, your phone pings with a message telling you it’s time to perform vehicle maintenance like oil changes and tire rotations.

For companies with larger fleets, you may receive notice that you have several trucks due for maintenance within thirty days. Your fleet becomes easier to manage with the quality control data that comes with a telematics GPS system.

Any vehicle that can be tracked effectively in real time is substantially more secure. Taking this proactive step will reduce your insurance premiums for your entire fleet. Many insurance companies provide discounted plans for businesses that use this telematics vehicle tracking technology – it’s a win-win for both the business and the insurer. Furthermore, many tracking devices can be programmed to lock car or truck doors, disable the starter, and other security features. All from the convenience of any smart phone or computer with internet access. Managing your fleet becomes easier for you and your employees with GPS systems installed.

5. With GPS tracking your vehicles are less apt to experience accidents, and insurance companies know this

Another benefit to GPS tracking is a reduction in the likelihood of accidents. When you track how your drivers use your vehicle they are less apt to use the vehicle for personal trips, and are more apt to be cautious with mileage and not drive out of the way of the most direct route. Insurers know that the more a vehicle is driven, the higher the chances are for any type of collision. In other words, you can lower insurance costs by lowering the unnecessary miles and personal miles driven by your employees. All of this adds up to larger overall annual savings on your bottom line and leads to healthier profits.

With GPS installed you can track your fleet from the road on a smartphone

Add the GPS technology of a fleet tracker to your fleet card package and you have everything you need to truly manage your fleet and it can be done while you’re on the road. Fleet telematics communicates with tracking devices to gather data – everything from vehicle location to speeds driven and driver stops can be tracked with this simple and easily installed device. Wherever you have internet access available, you can easily track any of your fleet vehicles on your computer or smartphone. In other words, your business can see where vehicles are and monitor driver activity in real time 24/7, anytime of day or night.

Will my insurer offer a discount for installing a GPS tracking system?

Most insurers offer a discount for companies that have GPS tracking installed on their vehicles. According to Forbes, “21st Century Insurance gives 15 percent off its comprehensive coverage premium for theft recovery devices like GPS trackers. Nationwide offers anti-theft discounts based on the state you live in and based on the type of device you install. Geico says customers can get up to a 25 percent discount.”

What do you need to provide insurance companies in order to get a GPS tracking discount?

In order to procure a GPS tracking discount most insurers require a business to prove that they have installed a telematics tracking device into all or most of their fleet cars and trucks. You will also have to show that you’re providing safety information feedback to drivers on a regular basis. The first step is to ask your current provider if they will recognize a discount on your insurance premium if you invest in fleet tracking technology for your business vehicles. The cost of commercial fleet insurance is affected by several factors which can include the policy limits and deductibles, the business purpose of the vehicles, the age and value of the vehicles, type of vehicles (passenger cars, vans, SUVs), and type of trucks (light, medium or heavy duty).

Contact your insurance company to find out if discounts are available in your region. Discounts vary by state with some companies offering a 30% or higher discount. There are 12 states that have laws mandating anti-theft device discounts to car owners: Illinois, Florida, Kentucky, Louisiana, Massachusetts, Minnesota, New Mexico, New York, Pennsylvania, Rhode Island, Texas, and Washington.

Becoming adept at using GPS tracker capabilities for your fleet is a quick and easy process

The process of learning to use a GPS tracker is fairly easy. The information the tracker collects via satellite is transmitted to the telematics software that businesses can see and analyze. This kind of technology is offered with the top fleet fuel cards in the market.

Keeping track of your assets is one of the most important business factors of a healthy annual balance sheet. When you combine driver and vehicle safety with automated tracking and fleet fueling technology, you have the best-case scenario for overall fleet efficiency and savings.

To learn more about WEX, a dynamic and nimble global organization, please visit our About WEX page.

All fleet cards are not the same, and different types of fuel cards suit the needs of different kinds and sizes of businesses. View WEX’s fleet card comparison chart to see which fleet fuel card is right for you.

Editorial note: This article was originally published on December 10, 2020, and has been updated for this publication.

Car & Driver Magazine
Insurance Information Institute
Forbes Advisor
Forbes Magazine
Rocky Mountain Insurance Information Association
United States Department of Transportation


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