Technology Today: Telematics and Warranty Claims

By Pat Crail, Contributing Editor | November 2, 2012

Over the past few years, I have talked with fleet managers who do not want equipment manufacturers to have access to their machine data. Many of these managers are considering aftermarket telematics systems to replace the original equipment devices installed on their machines. One of the most common objections is that they fear that the manufacturer will use the data gleaned from telematics systems to decline warranty claims. As a result, they are willing to spend hundreds of thousands of dollars to replace the factory-installed units with aftermarket units.

I believe the warranty claim fear is shortsighted. Several large manufacturers have told me that it would be myopic to use telematic data as a club to deny warranty coverage.

Manufacturers realize that the fault alerts telematics systems send out can be overwhelming and are often not actionable, so it would be quite unfair to expect the end user to monitor all of these alerts in case one out of thousands should actually indicate a problem. They also recognize that, should they use this information to deny warranty claims, word would circulate in short order that the manufacturer in question is denying claims based on this data. This would lead either to a flight to their competitors or the disabling of the telematics systems to make such data unavailable to the manufacturer.

My company has had manufacturers’ telematics systems installed on the largest machines in our fleet for more than five years. I have yet to have a warranty claim denied because of something the manufacturer or dealer saw in the telematic data record. Quite the contrary, I have had more than one failure occur after the warranty period expired, but because the telematic data showed that the failure had begun while the machine was still under warranty, we were able to obtain warranty coverage.

As for the manufacturer or dealer having access to our data, I view this as a positive rather than a negative. This data is far more valuable to the manufacturer in terms of product improvement and development than any amount they could recoup by using it to deny warranty claims. There are thousands of data points available to the manufacturers’ engineers, all of which are useful in solving problems and designing better, more efficient machines.

Imagine the utility to an engineer if he were able to view a particular hydraulic pressure reading across the entire population of a given model working everywhere in the world. By comparing the effects of other operational data, the engineer can measure their effects on the pressure that he is measuring and, quite possibly, identify and correct a problem. The same principle applies when using telematic data to drive product development.

Manufacturers are unlikely to forego the opportunity to use this information in such constructive ways simply to save a few dollars by denying warranty claims. They would be putting their brand and future viability at stake.

Rather than worry about some unlikely negative consequence resulting from the manufacturer viewing our data, we should recognize that this data will ultimately result in more productive, efficient machines as the information gleaned from these systems drives product development.

We should use the opportunity to build relationships with manufacturers and distributors. Distributors are in a unique position to add value by monitoring our machines remotely and alerting us to potential problems before they develop into expensive failures. Many dealers will gladly monitor the fault codes that your machine generates and alert you to any potential issues, as well as review machine history as part of the preventative maintenance inspection process.

Let’s use this technology as an opportunity to learn more about the conditions under which our machines run. If an operator is operating a machine incorrectly, or running the machine when it is too hot, I want to know about it so that I can take appropriate action to prevent a failure. Don’t you?