Will a security system lower my car insurance rates?
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UPDATED: Mar 13, 2020
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We are all looking for ways to lower our car insurance rates, and one of the ways we may be able to save money is by taking advantage of discounts available from insurance companies for a variety of factors. For example, if you work in a certain profession, such as teaching or medicine, you may qualify for a discount on your car insurance with your present company or another company. When comparing car insurance quotes, it is a good idea to see exactly which discounts various companies offer.
Vehicle Safety Equipment Discount
While this discount varies from one company to another, in general car insurance companies offer discounts for things that make you less likely to get hurt in an accident or make your car less likely to be damaged. By this method of calculating discounts, things like airbags and anti-lock brakes often mean savings to you on your insurance bill.
Anti-theft systems deter thieves from stealing cars because they make it difficult in some way for a thief to accomplish that goal. Car insurance companies take this matter seriously, as millions of dollars are lost every year to car theft. Even if the car is recovered, it is often damaged so badly that the insurance company must “total” it; many cars are never recovered at all.
Surprisingly, some of the “hottest” cars for thieves are not flashy sports cars or huge SUVs; the Honda Accord has been one of the most-stolen cars for several years running, along with the Toyota Camry and Dodge Caravan. Thieves are usually interested in cars which they can sell, and popular models with many integrated features are popular targets.
Thieves are also likely to choose cars which have loads of “features.” Sometimes thieves do not want the car at all, but the fantastic stereo system it contains. Of course, this also results in significant damage to the vehicle, so anti-theft devices can also deter this type of “standing” theft and help keep your car from being vandalized.
In order to prevent your car from being stolen, you may have purchased a car with integrated anti-theft devices or installed them yourself post-factory. For example, “The Club” has become very popular anti-theft device which costs less than $100. It can be installed or removed in seconds from a steering wheel, and prevents thieves from driving the car. Some car insurance companies will give you a discount for this sort of anti-theft protection, although most prefer to see integrated or “on-board” anti-theft measures in order to give discounts.
Most onboard anti-theft devices consist of two components: a loud, attention-drawing siren or alarm, and an ignition shut down. Most newer cars some with “chipped” keys, or keys that contain microchips that activate your engine. Unless your key has a chip, your car will not start. Other cars have after-market security installed, at a cost of $150 to $1,000. The better the brand and the more comprehensive it is, the more likely your insurance company will give you a discount.
After Market Installation
In thinking about installing after-market security, be sure to weigh the cost of your comprehensive insurance deductible and any discounts you may receive against the cost of the system. For example, if you will receive a ten percent discount on your comprehensive premium of $500 per year for installing a security system, and your comprehensive deductible is $250, you would have to receive the discount for five years to equal the amount of your deductible. You would have to receive the discount for even more years to pay for the cost of installation. If your system costs $1,000, it is unlikely you will ever “break even,” even if you have a discount from your company.
Of course, saving money is not the only reason to install a security system. You may feel safer, or may simply want to avoid the hassle of a thief taking your car. If you can afford the cash outlay, installing a security system is usually a good idea, even if you never regain the cost of the system itself.