By Greg Bartlett
Insurance: it’s a necessary, but sometimes frustrating expense. Premiums must be paid each month and a wide variety of circumstances can cause rates to increase. Sometimes these circumstances are beyond the consumer’s control. If your car is stolen, your insurance may cover the loss, but you can be sure your premiums will skyrocket. Wouldn’t it be nice if insurance companies would reward good behavior by decreasing premiums rather than reacting to claims with increases? Believe it or not, some insurance companies are willing to work with customers in this way and GPS vehicle tracking can take much of the credit.Vehicle tracking devices transmit a signal which gives the location of the vehicle or item they are attached to. Some models have the ability to transmit other information as well, such as fuel consumption and speed of a vehicle. Insurance companies use this information to monitor the habits of drivers and adjust their rates accordingly. This is most commonly utilized by companies insuring fleets of commercial vehicles, but as GPS technology becomes more widely used, more companies will be willing to work with individuals as well. In addition to lowering rates on the front end, vehicle tracking devices can also keep rates from increasing by enabling better and faster recovery of stolen vehicles. The fewer claims that the insurance company has to pay out, the lower the consumer’s rate will be.
While the initial investment in GPS vehicle tracking may seem steep for a company that owns multiple vehicles, still, the cost savings over time ensures that the technology will be well worth the investment. Some companies reported tens of thousands of dollars in savings over the course of a year due to GPS tracking. We have all groaned over the increase in insurance when a teenager begins driving. Because teens are high risk, insurance companies jack the premiums through the roof. With GPS vehicle tracking, however, teens with good driving records can be rewarded with reduced insurance rates—and Mom and Dad may be more willing to hand over the keys on a Friday night.
Most people recognize the necessity of insurance. Those same people often wince at the high premiums coming out of their paychecks every month. GPS vehicle tracking devices may be able to lessen the pain by providing greater knowledge of the driving habits of each driver on the policy, thereby giving both insurance companies and consumers a reason to smile.