Anti-theft devices like car alarms, steering wheel locks, and GPS trackers promise to keep your car safe from thieves. But some people claim that adding anti-theft protection will actually raise your auto insurance premiums. Is this true? Or is it an auto insurance myth?
The short answer is: it depends. Anti-theft devices can sometimes lower your insurance premiums. But in other cases, they have no effect or may even slightly increase your rates. Below, we’ll explain exactly how anti-theft devices can impact your car insurance costs.
How Auto Insurers View Anti-Theft Devices
Auto insurance companies care about risk. Drivers they deem “high risk” pay more for coverage. Those considered “low risk” pay less.
Insurers look at many factors to determine your level of risk, including:
- Your driving record
- Your credit score
- Your age, gender and marital status
- Your car’s safety features
- Your car’s risk of theft
The last two points relate directly to anti-theft devices. Here’s a quick overview of how insurers view them:
Passive devices like auto recovery systems, VIN etchings, and car alarms may slightly lower premiums. But discounts are generally small (1% to 15%).
Active devices like GPS trackers allow insurers to recover stolen vehicles. This significantly reduces claim costs. But premium discounts vary widely in availability and amount.
Physical devices like steering wheel locks, brake locks, and vehicle immobilizers act as visual deterrents. But discounts are inconsistent across insurers.
Aftermarket alarm systems don’t guarantee savings. Many newer model cars come equipped with alarms standard. Adding another likely won’t impact rates.
So while anti-theft devices show you’re committed to protecting your car, savings aren’t guaranteed. The key factors that determine premiums we listed earlier – like driving record and credit score – play a much larger role.
Do Claims Really Go Up After Adding Devices?
Some drivers report that their insurance rates increased after adding anti-theft systems. Does this mean the devices backfired?
Not necessarily. There are a few potential explanations:
Your rate increase was coincidental. Annual rate hikes from your insurer could have overlapped with installing the device. Correlation doesn’t equal causation.
You qualified for other discounts before. The prior policy term, you may have been eligible for things like good driver, good student, or low mileage discounts. These may have masked the anti-theft device surcharge.
Your insurer caps discounts. Some companies limit the number of discounts you can earn simultaneously. If you hit the cap before, the anti-theft discount had no effect.
Limited data for the device. Newer or less common devices don’t have enough claims data for insurers to determine the savings accurately. So they may not provide a discount yet.
Differences in risk factors. Even with an anti-theft device, other major factors like driving violations or a claims-laden history can outweigh any potential savings.
Insurers want usage-based data. For active systems like GPS trackers, some insurers want to see how you actually drive before providing a discount. This requires sharing data on acceleration, braking, mileage, and time of use.
The bottom line is that many things can affect your insurance rates when you add anti-theft protection. But premium hikes don’t appear to be a direct result of the devices themselves.
How to Increase Your Chances of Getting a Discount
If you want to maximize your chances for insurance savings, here are some tips:
Ask your insurer for suggested devices. Some companies publish lists of anti-theft systems they recommend. Using one of these endorsed devices can improve your odds of qualifying for premium reductions.
Consider passive over active devices. Systems like VIN etching and wheel locks have simpler installation and don’t require active monitoring. This makes insurers more likely to provide a small discount for them.
Choose common versus cutting-edge devices. Opt for systems that insurers are familiar with. Newer, high-tech devices won’t have enough loss data for actuaries to analyze potential savings accurately.
Install multiple devices. Layering anti-theft systems can reinforce your commitment to protecting your vehicle. Just beware of max discount caps as noted earlier.
Ask about usage-based options. Insurers rewarding actual driving data may offer the biggest discounts. But you’ll have to share personal tracking information.
Maintain a clean driving record. Avoid accidents, traffic violations, and claims. Major risk factors like these outweigh any potential savings from anti-theft devices.
Shop around. Compare quotes from multiple insurers. Make sure to highlight your anti-theft system. Some companies offer better discounts than others.
The Best Anti-Theft Systems for Savings
While discounts vary widely, three types of anti-theft protection seem most likely to lower your auto insurance rates:
GPS trackers: Active systems allow insurers to recover stolen vehicles, reducing claims. But usage-based data may be required for maximum discounts.
VIN etching/window stickers: Permanently etched VINs and visible warning stickers deter amateur thieves. This passive approach offers reliable savings of 1% to 15% with most insurers.
Factory-installed alarms: OEM alarms meet minimum effectiveness standards. Aftermarket systems are less standardized, so may not qualify for discounts.
Other devices like kill switches, steering wheel locks, and wheel locks likely help in theft prevention. But insurance discounts for these physical deterrents are mixed at best. Their visible nature can even raise theft risk in some areas.
Case Studies: Do Discounts Really Materialize?
Looking at real-world examples can help reveal how anti-theft devices actually impact car insurance rates:
Case 1: Factory Alarm
John insured his 2015 Toyota Camry with State Farm for $1,200 per year. His Camry came equipped with an OEM factory alarm system. State Farm’s website indicated this “standard integrated or factory-installed alarm system” qualified for theft prevention discounts.
After reviewing his policy, John’s agent applied a 5% discount for the factory alarm. This saved him $60 per year.
Outcome: Factory-installed alarms can yield modest savings of 5% or more with most major insurers. But results vary depending on your provider, vehicle, and policy specifics.
Case 2: Aftermarket GPS Tracker
Jessica insured her 2019 Jeep Wrangler with Allstate for $2,400 per year. She had no accidents or tickets, but lived in a high-crime city. After her neighbor’s car was stolen, she had an aftermarket GPS tracker installed for $200.
When her policy renewed, Jessica asked Allstate about a discount for her new anti-theft device. But her rates stayed exactly the same.
Allstate’s fine print said they needed actual usage-based data from the tracker before applying savings. Discounts required sharing personal driving habits with the insurer via an app. Jessica opted out due to privacy concerns.
Outcome: GPS trackers can provide big discounts, even 30% or more. But insurers increasingly require you share data from the device for maximum savings.
Case 3: Steering Wheel Lock
Javier insured his 2001 Honda Accord with Geico for $900 per year. His neighborhood had high theft rates, so he decided to add The Club steering wheel lock for $50.
When updating his policy, Javier confirmed Geico did not offer discounts for steering wheel locks. He decided to keep using The Club as an added safety measure, but didn’t expect it to lower his rates.
At renewal, Javier’s Geico premium went up by $60 for the new policy term. He saw no savings from the steering wheel lock.
Outcome: Physical anti-theft devices like The Club don’t guarantee savings. Some insurers explicitly exclude them from discounts. It depends on the company and policy.
The Bottom Line on Anti-Theft Devices and Insurance Rates
There’s no absolute guarantee that adding anti-theft protection will lower your car insurance premiums. But devices with passive tracking like VIN etching and OEM alarms have the best chance for modest 1% to 15% savings.
Active systems like GPS trackers have potential for even greater discounts. However, you may need to share personal driving data with your insurer to qualify.
Physical deterrents like steering wheel locks are hit-or-miss regarding actual savings. Make sure to check with your provider on discount eligibility for any device you’re considering.
And remember: maintaining good driving habits remains the #1 factor within your control to lower insurance rates. Anti-theft devices provide only an incremental extra layer of potential savings on top of that.
So consider them for added peace of mind and theft protection. But don’t expect them to revolutionize your insurance rates on their own. Smart shopping, safe driving, and the right insurance provider for your needs will make the biggest impact on premium costs.
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