How GPS Trackers Can Help Lower Your Car Insurance Premiums
As car insurance rates continue to rise due to increasing claims costs, repair prices, and a surge in reckless driving, finding ways to offset these expenses has become necessary for many drivers.
The U.S. Bureau of Labor Statistics (BLS) reports that car insurance costs have surged 18.6% over the past year, with premiums now almost 47% higher than they were at the start of the pandemic in early 2020. Rising claims expenses are a key factor behind this trend, leading insurers to adjust consumer rates accordingly. “Insurance prices must reflect the expected losses paid to policyholders,” says Dale Porfilio of the Insurance Information Institute, explaining that as claim costs climb, insurance rates must follow suit.
GPS trackers are emerging as a powerful tool, helping policyholders earn discounts by promoting safe driving and providing data that insurance companies love.
Why Are Car Insurance Rates Rising?
According to recent data, drivers are paying more for car insurance due to factors like more frequent and costly claims, complex vehicle repairs, and severe weather incidents. The National Highway Traffic Safety Administration reported over 5.9 million car accidents in 2022, with accident severity climbing; bodily injury claims have surged by 20% since 2020, while vehicle material damage is up 47%. Dangerous driving—speeding, DUI, distracted driving—is increasingly common, especially among younger drivers. Advanced car technology also drives up repair costs, as ADAS (driver assistance systems) require complex recalibrations. With inflation and climate impacts, premiums continue their upward trend.
Insurance companies use various risk factors—mileage, driving patterns, and accident history—to determine premiums, and these metrics are driving premiums higher year over year.
How GPS Trackers Lower Insurance Premiums?
Insurance companies are increasingly offering “usage-based insurance” (UBI), which allows you to pay premiums based on your actual driving behavior. GPS trackers provide this data, from your daily mileage to real-time driving habits. Here’s how they help reduce premiums:
- Reduced Mileage Discount:
With GPS tracking, insurers can verify exactly how far you drive daily, giving them precise data to adjust premiums based on actual mileage. If you drive less, there’s less risk of accidents, which qualifies you for a “reduced mileage” discount. Many insurance companies are shifting to these usage-based premiums, rewarding drivers who stay off the road. - Safe Driving Discounts:
GPS trackers log speed, acceleration, braking, and time of travel, creating a comprehensive picture of your driving habits. Insurance providers use this data to assess risk, and if you maintain safe practices—like moderate speed and steady braking—you can secure significant premium discounts, as lower-risk drivers typically pay less. - Theft Recovery Benefits:
A GPS tracker can locate a stolen vehicle quickly, reducing the potential financial loss for insurers. Vehicles equipped with these trackers have higher recovery rates, which helps insurance companies avoid costly payouts. As a result, many insurers offer discounts to drivers with GPS trackers, recognizing the reduced risk of theft-related claims.
Real-Life Examples of Insurers Offering GPS Discounts
- Progressive Snapshot: Progressive’s UBI program Snapshot, provides discounts based on actual driving data collected via a mobile app or a plug-in device. Drivers who showcase safe habits and limited mileage can earn significant reductions.
- State Farm Drive Safe & Save: State Farm uses GPS data to monitor driver behavior. Drivers with good scores, recorded through consistent, safe driving, can see discounts as high as 30%.
- Allstate Drivewise: Through Drivewise, Allstate offers rewards for safe driving metrics collected via GPS, giving drivers lower rates when they avoid speeding, sudden stops, and late-night drives.
Key GPS Tracker Features That Benefit Insurance Rates
- Real-Time Location Tracking:
A GPS tracker with real-time location tracking logs every mile driven, an essential metric for insurers when determining premiums based on actual usage. By providing accurate mileage data, you can potentially qualify for lower rates, as insurers reward lower mileage due to its correlation with reduced risk. - Driving Behavior Monitoring:
Trackers that record driving behavior, including braking, acceleration, and cornering, can demonstrate safe driving habits to insurance providers. Consistently safe patterns signal low-risk driving, making you eligible for discounts as insurers are likely to offer savings for responsible, low-risk drivers. - Geofencing Capabilities:
Geofencing allows you to set boundaries, ideal for parents of young drivers. Alerts notify you if a driver leaves or enters designated areas, showcasing a proactive approach to safe driving, which insurance companies recognize as lowering risk, often translating into premium reductions. - Crash Detection:
GPS devices with crash detection instantly report accidents to emergency services and insurers. This rapid response minimizes claim processing times and injury risks, which can lead to premium reductions, as insurers value prompt reporting and recovery, cutting their potential costs. - Anti-Theft Alerts:
Anti-theft GPS trackers increase the likelihood of vehicle recovery, reducing the overall cost of claims for insurers. These alerts allow for quick action in case of theft, and many insurance companies reward this reduced risk with significant discounts for policyholders.
How to Choose the Right GPS Tracker?
To start saving big on your insurance premiums, choosing the right GPS tracker is key. First, check with your insurer for any UBI program details and a list of preferred devices. Most insurers reward specific features, so look for trackers that offer real-time tracking, behavior monitoring, and mileage tracking. These data points help you nail down safe-driving discounts and reduce premiums. Don’t just grab any tracker—find one that fits your driving style and insurance requirements to maximize your savings. This smart choice could mean massive insurance discounts that keep cash in your pocket!
Conclusion
In a time when insurance premiums seem to climb higher each year, GPS trackers offer a clear path to savings. They not only give drivers valuable insights into their own habits but also enable insurers to reward safe, low-risk driving. For drivers eager to take control of their insurance costs, GPS trackers could be the investment that pays for itself over time.
