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Effect of Anti-Theft Device and its Impact on Car Insurance Premium

Team AckoJan 17, 2024

Cars are precious. And that is precisely why they need to be protected. Car theft is a common occurrence – the numbers can be higher or lower depending upon different locations. No matter how secure the parking area is, there is always a possibility of car theft. This is where anti-theft devices can prove immensely helpful.

They can not only prevent car theft but also come in handy to reduce the car insurance premium. The following sections will introduce you to the different types of anti-theft devices and their impact on the payable premium for car insurance.

Contents

Anti-theft Devices and a Car Insurance Plan:
Benefits of Having an Anti-theft Device in Your Car:
Types of Anti-theft Devices for Cars:
Do New Car Models Come with Built-in Anti-theft Devices?
What is the Cost of Anti-theft Devices?
Impact of ATD on Car Insurance Premium:
Frequently Asked Questions:

Anti-theft Devices and a Car Insurance Plan:

An anti-theft device is a gadget that helps to keep your car secure. It can use multiple technologies to achieve its objective. There are various types of anti-theft devices ranging from locks to alarms. There is a strong correlation between anti-theft devices and car insurance. If you look closely, a car insurance policy is a promise – the insurer helps the policyholder financially if something untoward happens to the vehicle as per the terms and conditions.

If nothing happens, the insurer does not need to pay the policyholder. Therefore, it is in the interest of the insurer to safeguard the insured asset – in this case, the insured car. And anti-theft devices do just that – enhance the car’s security, act as a theft deterrent, and help in tracking the car. As a result, insurers encourage car owners to install anti-theft devices in their vehicles. And they reward such owners with discounts on the car insurance premium.

Note that in an Indian scenario, the anti-theft devices need to be certified by the Automotive Research Association of India (ARAI) to avail the anti-theft discount concerning the car insurance premium.

Benefits of Having an Anti-theft Device in Your Car:

Here are the benefits associated with anti-theft devices (ATD) for cars in India.

1) Prevent Theft:

ATDs can help prevent theft by discouraging thieves from attempting to steal the vehicle. For example, if the thieves have the option of stealing two cars – one with a tyre lock and an alarm and another having no such security. Which one do you think the thieves will go for?

2) Stopping Theft:

ATDs offer the crucial buffer time during which the theft can be avoided. For example, the thieves are unaware of the car’s alarm system and they try to break their way in. The alarm goes off and sends the thieves in panic mode. The security guards or other people near the car are alerted and the chances of the thieves abandoning the plan and calling off the theft increase. They can be caught in the act as well. Thus, the theft can be stopped.

3) Car Insurance Discount:

Installing certified ATDs and letting your insurance company know about them can fetch you a discount while buying or renewing a Comprehensive car insurance policy. In case you have installed the ATD and want to benefit from the associated discount, you will have to be proactive and inform the company about your security measure via call or email. Usually, such a provision is not available in the online policy purchase/renewal flow.

4) Seamless Claim Settlement:

Installing an ATD showcases your desire to safeguard your vehicle. In case of a theft claim, such an act can mean that you had actively taken measures to safeguard your car, but despite that, it got stolen. It can help the insurance company in understanding that you did what you could do to prevent the theft and this can result in seamless claim settlement.

5) Avoiding Inconvenience:

Facing the trauma of car theft, visiting the police station for filing the First Information Report (FIR) and coordinating with the insurance company can prove to be inconvenient. As there is a high probability that ATDs can avoid all this, then why not install one? ATDs can be beneficial in avoiding such kinds of inconveniences.

6) Financial Safety:

A loss is a loss – it cannot be sugar-coated. Even if you claim insurance for the stolen car, you shall receive the Insured Declared Value (IDV) and not the price you paid to purchase it, unless you have an Invoice Protection Add-on. ATDs can prevent such a loss by preventing theft.

Types of Anti-theft Devices for Cars:

Here are different types of anti-theft devices for four-wheelers. Make sure to buy only those anti-theft devices that are ARAI approved.

1) GPS Tracking:

This device can come in handy in tracking the stolen vehicle. It works based on the Global Positioning System (GPS) and offers a real-time location of the vehicle if the system is active.

2) Car Alarm:

This is a sound-based ATD. If anyone tries to tamper with the car, the system will sound an alarm alerting the people around the car. A car-alarm based anti-theft device is usually not too costly.

3) Electronic Immobiliser:

Some advanced car keys are fitted with a technology that sends signals to the vehicle to start the engine. Without such signals, the car does not start. You can use such anti-theft electronic immobilisers to keep your car safe.

4) Mechanical Immobilisers:

Mechanical immobilisers have a variety of options under it. These devices are not hi-tech, and as a result, are not that expensive. They make use of mechanical devices to stop the car’s mobility. Tyre Lock, Steering Lock, and Gear Lock are prominent examples of mechanical immobilisers.

5) Kill Switch:

This device involves a switch that can switch off a part of the car’s engine, rendering it immobile until the switch is on. Such types of switches can be installed in a hidden location in the car to prevent thieves from accessing it.

Also, read: What is No Claim Bonus (NCB) in Car Insurance?

Do New Car Models Come with Built-in Anti-theft Devices?

Some new car models might feature one or a combination of ATDs. You can have a detailed discussion with the car dealer about the anti-theft system in the car before buying the vehicle. If the vehicles do not come equipped with an ATD, you can take the initiative and choose a suitable device yourself.

What is the Cost of Anti-theft Devices?

Safety devices that protect the car from theft are available in a wide price range. You can check out the price range on online stores to get an idea. For example, a tyre lock can cost around INR 1000.

Impact of ATD on Car Insurance Premium:

If you have installed an ARAI-certified ATD in your car, you can fetch a discount of around 2.5% on the payable premium from your motor insurance company while buying/renewing car insurance online/offline.

Also, read: Insurance for Bike Theft

Frequently Asked Questions:

The following section puts the spotlight on some commonly asked questions about ATD and car insurance. In case you have a specific question, write an email to [email protected] for answers.

Is it mandatory to install an ATD in cars?

No, it is not compulsory to install an ATD in your vehicle, but it will be beneficial if you do so.

Do all new cars feature in-built ATDs?

All new car models might not feature ATDs. It is suggested to speak to the car dealer in detail about such features.

What kind of precautions should I take along with installing an ATD?

You should park your car in an authorized area, cover it if needed, and park it in a well-lit place.

Which type of ATD is ideal for my hatchback?

You can select a suitable ATD based on its features and your budget. There is no one ideal ATD, different people find different devices to be ideal. It is all about finding a device that meets your requirements.

When should I inform my insurance company about the installed ATD in my car?

You should inform your insurer immediately after making any kind of changes in your vehicle. The change in premium might occur immediately or during policy renewal based on the terms and conditions of the insurance company.

Will the vehicle insurance calculator display an ATD discount for my new car’s motor insurance policy?

Usually, car insurance calculators do not consider the ATD discount while calculating the vehicle insurance rates. Therefore, you will have to contact the insurer and ask for the applicable ATD discount amount.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

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