Will a tracking device reduce your car insurance payments?
Does installing a tracking device reduce car insurance premiums?
- Insurance companies do reward motorists with added vehicle safety features
- Tracking devices combat crime
- Telematics may be a cheaper solution
- Younger drivers can also benefit from telematics
- Driver behaviour can impact on monthly insurance premiums
- Always contact your insurer before installing a tracking device
Lower premium rates are offered by some insurance companies if a vehicle is fitted with a tracking device, but consumers are advised to weigh up the costs involved against monthly insurance payment savings before making a final decision.
Fitting a vehicle with a GPS tracking device is expensive and also requires a monthly or annual monitoring fee. Motorists should take into account the cost of installing a GPS system and the likelihood of someone stealing their vehicle. They should compare these against the savings they will achieve on their insurance policy.
How does a tracking device work?
The system activates the moment someone tampers with the vehicle.
For example, if the engine starts without the ignition key a signal goes to the monitoring station and the police receive an alert.
The vehicle owner also gets and alter to determine whether an authorized driver is using the vehicle if the monitoring station detects that it is moving in suspicious times and places.
Another enhancement to GPS tracking is “engine kill” – a stolen vehicle will come to a standstill within a short distance from the scene of the theft.
Telematics offers a cheaper alternative
Telematics is like a black box in an aircraft. It records driving behaviour and, based on that information, insurance companies can assess the risk factor and peg the premium.
Telematics is becoming more popular, particularly among younger drivers whose insurance premiums are far higher than motorists from the 30+ age category. The system analyses driver behaviour and if an insurance company assesses that the driver is a good road handler it could lower monthly premiums.
The telematics box records everything about driver handling and the vehicle itself, such as whether or not the vehicle is parked in a safe environment overnight.
There are five main areas that telematic technology will analyse:
This enables insurance companies to examine driver behaviour such as cornering too quickly, speeding and braking sharply.
Some motorists may regard telematics as a “Big Brother” approach, but it is undoubtedly a reward option worth considering because of the savings on premiums that a conscientious driver could enjoy from his/her insurance company.
How tracking devices help combat crime
Most vehicle thefts and hijackings are committed for the following reasons:
- Taking vehicles across South African borders for use or sale in another country
- “Cloning” the vehicles for legal resale
- Dismantling vehicles for their spare parts
Having a tracking device fitted to your vehicle will help combat this crime syndicate.
Contact your insurance company to make sure they approve of the brand of tracking device you wish to have installed into your vehicle. Also, ensure that a tracking device will reduce your monthly premium before going ahead with the added expense of the purchase and monthly monitoring fee.
Many insurance companies will offer reduced premiums if the vehicle is fitted with an alarm and immobiliser.
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