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Why yard operators’ insurance premiums are set to rocket as more EVs are totaled

Slowly but surely, the word is getting out. Last April, Consumer Reports warned its six million members that electric vehicles (EVs) often cost more to insure. Why? Because they’re more expensive to repair—and, in fact, are more likely to be declared a total loss after a crash.

Car and Driver magazine has alerted its 1.25 million readers to the same issue, noting that high insurance premiums prompted Tesla to launch its own insurance subsidiary, specializing in Tesla vehicles. And pricing guide Kelley Blue Book has cautioned subscribers that even minor damage to an EV’s battery area is likely to cause the vehicle to be written off.

Why is this so? It’s because of the way EVs are constructed, say automotive industry insiders: batteries—almost by definition—are difficult to repair, and the vehicles themselves contain extensive battery protection and containment components. Structurally, the result is that EVs are very different from traditional internal combustion-powered vehicles.

EVs and costly collisions

For the downstream finished vehicle logistics industry, the implications of all this are obvious—and troubling. The insurance premiums paid by the operators of downstream vehicle yards will be higher. And, as the proportion of EVs in the vehicle mix increases over time, they will rise even higher.

Worse still, EVs have a very different throttle profile from traditional internal combustion-powered vehicles, with their electric motors achieving full torque instantly.

In the confined spaces of a vehicle yard, and when drivers are under pressure to achieve high numbers of vehicle moves per shift, the result is to render accidents more likely than with conventional internal combustion-powered vehicles—with every accident, don’t forget, being likely to affect two vehicles. And even minor accidents can result in vehicles being declared total write-offs.

All of this calls for yard operators to redouble their efforts to minimize accidental damage to vehicles: more and better driver training, fewer in-yard moves per vehicle, fewer instances where drivers are—perhaps literally—racing to meet vehicle movement and loading targets, and better retention of skilled, experienced, and safe drivers.

The ROI? Lower insurance premiums, reduced costs of recruiting and training replacement drivers, and better driver utilization. And all of that—as we’ll shortly see—is just for starters. Because, among other benefits, it’s also possible to almost completely eliminate periodic yard audits, for instance, which often consume a significant amount of yard personnel time.

Less time searching, more time for driving

So how is all this achieved?

Simple: with an ultra-accurate real-time location solution (RTLS), such as the one that Cognosos offers. Low-cost wireless-equipped GPS-enabled tracker tags transmit vehicles’ location to radio-frequency gateways that can be as far as two miles away, and from there to the Cloud—and from there to a console in the yard management office, and from there to drivers’ smartphones.

Drivers know exactly where a given vehicle is. And to make their lives even easier—and the search time even shorter—tapping their smartphone’s screen causes the tag’s Spotlight to flash, guiding drivers directly to the correct vehicle.

No time wasted checking vehicles’ VINs, no fruitless searches for vehicles that aren’t where they are supposed to be—and, for the driver, less time spent getting cold, wet, or overheated in inclement weather conditions.

The result: a dramatic rise in driver productivity and utilization. Search times are effectively cut to zero, and the majority of each vehicle movement cycle time is spent driving, rather than searching. Forget periodic yard audits, too, undertaken to flush out mislocated vehicles: with accurate real-time vehicle visibility, mislocated vehicles become a thing of the past

Don’t forget, too, that real-time vehicle visibility solutions typically deliver a reduction in the number of times that vehicles are moved within yards—meaning that there are fewer opportunities for collisions to take place. Reduce average vehicle movements by 50%, and you also reduce collisions by 50%.

Monitoring driver behavior

A real-time vehicle visibility solution also helps reduce yard operators’ insurance premiums in another important respect.

“Accidents” aren’t always accidents. Every yard operator knows that drivers’ driving ability and driving style vary significantly: some are the ‘safe-and-steady’ types, and others are more inclined to race around the yard and rush things. Not surprisingly, it’s these racy types who have the most accidents. Accidents that can be very expensive, if those drivers are driving—or colliding with—an EV at the time.

But how to identify these unsafe drivers? Simple: just like GPS-enabled tracker tags keep track of vehicle locations, similar tracker tags carried by drivers keep track of driving behavior, enabling yard operators to provide remedial training and in-yard signage, weed out problematic employees, and discover and promulgate driver best practice.

The result? Fewer accidents—and lower insurance premiums.

Retain your experienced drivers

Real-time visibility brings other important benefits, too—and a benefit that plays directly to the agenda of reducing the number of in-yard vehicle collisions.

Think back to all those drivers repeatedly getting cold, wet, or overheated in inclement weather conditions, day after day, week after week, month after month. No wonder most yards’ driver retention levels are low: employment inside, rather than outside, is infinitely more comfortable. With an ultra-accurate RTLS, drivers are far less exposed to the elements, because they don’t need to spend time hunting for vehicles. Out of the shuttle bus; into the car. It’s that easy—and quick.

So they’re less likely to quit. Meaning that yards get to retain skilled and careful drivers. And meaning that in-yard accident rates benefit.

Get the facts on real-time vehicle visibility

To learn more about Cognosos’ ultra-accurate RTLS—and to discover how it could improve your in-yard EV accident rate, get our guide, “The Alignment Advantage: How to FVL Improve Efficiency and Profitability,” to uncover

  • The Costly Challenges of the Downstream Finished Vehicle Supply Chain
  • The Benefits of Improved Vehicle Visibility
  • How to Achieve True Real-Time Vehicle Visibility
  • And more

Get your free guide now.

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