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What is the effect of an anti-theft device in a car insurance plan?

An anti-theft device, as the name suggests, is an instrument that protects your vehicle from the possibility of being stolen. As more and more people buy and own cars, vehicle theft is on the rise. Naturally, one cannot predict when one’s car might be stolen, but one can increase its security.

Purchasing a car with an in-built anti-theft device or having such a device installed in your vehicle would be a step in the right direction. Car insurers consider customers who have anti-theft devices installed in their vehicles to be responsible car owners; as such, they reward these owners through discounts on their insurance premium.

Why do car insurers reward the owners of cars with installed anti-theft devices?

The number of stolen cars is bound to drop given the presence of anti-theft devices. Criminals who are bent on stealing one or more cars will eventually find the loopholes to these devices; until then, however, anti-theft systems do deter car thieves attempting to steal a car. Claim figures show that the increasing installation of anti-theft devices has led to a fall in the number of claims. Furthermore, car insurers benefit when insurance claims are fewer. It is in their best interest to reduce the overall number of claims. Hence, they encourage car owners to set up anti-theft devices in their vehicles by offering discounts on the premium.

To what extent do car owners benefit if they have anti-theft devices installed?

Car insurers typically offer a 2.5 percent discount on the premium up to a maximum of Rs. 500 if the customer’s vehicle is fitted with an anti-theft device. However, the discount does not apply to the entire premium amount. The discount is on the own damage component of the annual premium; the component of premium covering third-party damage is not discounted.

Do new cars come with pre-installed anti-theft devices?

Many new cars nowadays already come fitted with anti-theft devices. Most luxury cars have an in-built anti-theft system. But even more budget and mid-segment players like Maruti Suzuki now feature some kind of anti-theft device. Insurers welcome this practice because having more vehicles fitted with anti-theft instruments would bring down the numbers of vehicular theft and, in turn, this would reduce the number of own-car damage claims piling up at insurer branches. However, not all vehicles will have an anti-theft installation. If you own an older car, you will have to install the anti-theft system separately.

What kind of anti-theft device should you install in your car?

Any anti-theft device that you choose to install in your vehicle must be approved by the Automobile Research Association of India (ARAI). The installation itself must be certified by one of the four Automobile Associations operating in India. Common brands like AutoCop, Nippon and Xenos have ARAI approval but you should always check the product packaging to ascertain this. Note that in the case that you are installing an anti-theft device in your vehicle, the premium discount will apply for the remaining period of the policy.

 

Written By:  Deepak Yohannan

The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal

               

For more articles by Deepak Yohannan, please visit MyInsuranceClub.com

You may contact him directly on Twitter: @dyohannan

 

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