There is no dispute around the effectiveness of vehicle tracking devices in combating vehicle crime!
The South African Police Services recently revealed crime statistics for 2009 – and this makes for interesting reading. There is an interesting note included in the Crime Stats report – and we would like to quote:
“Carjackers mostly differ from the groups above. They are usually part of hijacking syndicates or serve as suppliers to highly organized syndicates at a higher level of organized crime. Most carjackings are committed with the following in mind:
• Exporting the vehicles to another country.
• Cloning the vehicles and re-entering them into the legal market.
• Dismantling the vehicles for spare parts.
To achieve (particularly the first two of) the above aims with hijacked vehicles, requires the involvement of organized crime. It can only succeed with higher level planning, corruption of Police, Home Affairs, SARS and licencing officials and will most probably involve money laundering and multidimensional organised crime.”
The graph that summarizes the crimes related to robbery is:
Car Insurance and Vehicle tracking Devices
Car Insurers are very aware of the real risk of property/ vehicle loss through theft and hijacking and are also taking action to prevent such loss. Apart from working closely with the Police Services, the Insurance Crime Bureau and Vehicle Manufacturers – they are also placing a greater emphasis on the installation of vehicle security devices such as tracking systems.
Car Insurers are also offering to reward vehicle owners who have tracking devices installed by offering discount/ reduced car insurance premiums.
Broadly speaking, a car insurance premium is mostly made up of an accident risk portion and a theft risk portion. Generally there is a far higher risk of a car being in an accident than being stolen resulting in the accident portion being far higher than the theft portion. This ratio between accident and theft would obviously change if the vehicle is more prone to being stolen. A Tracking Device would only have an effect on the theft portion of the car insurance premium, i.e. the smaller portion.
I have approached a few car insurance companies – and would like – without reference to the specific brands, to share some insight pertaining to how this is approached:
• Some insurance products developed around the principle of Pay As You Drive – have these tracking devices as an integral part of the insurance product and calculation of the insurance premium.
• Some insurers require the installation of a tracking device for some “high risk” vehicles even before offering to insure such vehicles.
• One insurer has revealed that the average discount is around 2.5%. It varies between 0% (when the minimum premium gets applied) and 15 % (a vehicle with a high theft risk).
• It is important to note that in the one example the discount is 33% that get’s applied to the theft portion of the premium, which is usually very small. Thus, the discount on the final office premium will depend on the size of the theft portion relative to the total risk premium, and the size of the risk premium relative to the fixed expenses.
• Another insurer preferred not to reveal specific amounts but confirmed that the premium is definitely cheaper on account of the reduced risk.
Communications with car insurers on tracking devices
Where you purchase your car insurance and your vehicle tracking device should not be seen in isolation. It is important to communicate with both your tracking service provider and your car insurance company to confirm whether the tracking device is “accredited” as such by the insurance company and will reduce your car insurance premium.
If this does not offer you a saving – it might be worthwhile to shop around a bit more for either the tracking device or the car insurance policy. It might also be important to carefully read the terms and conditions of your emergency assistance agreement or the car insurance policy to ensure that you are not bound for a specific term and liable for payment of penalties on early withdrawal.
Also confirm pricing of premiums and ask what the difference would be in premium payable with or without the tracking device! The installation of an effective tracking device will however do more than reduce your premium – it might make your vehicle less of an target, provide peace of mind and avoid much agitation having to deal with insurance claims and car dealers!!