How GPS Tracking Can Drop Your Insurance Payments

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According to the FBI’s Uniform Crime Reporting Program (UCR), there were over 700,000 vehicle thefts or attempted thefts in the United States in 2019 alone (Source: FBI UCR). What is really staggering is what those thefts mean to individuals. Those approximately 700,000 vehicle thefts resulted in a loss of over 6 billion dollars in a single calendar year, translating to a loss of approximately $8,000 per individual vehicle owner or, in many cases, their insurance provider. Year over year, these expenses only increase.

As a vehicle owner, how can you protect yourself? Insurance companies are frequently responsible for making payouts to vehicle owners who have had their vehicles stolen, resulting in losses. Because of this, many insurance companies are offering incentives that can provide mutual benefits to themselves and vehicle owners.

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What incentives do insurance companies offer to drivers to help them save?

Many insurance companies are now offering programs to help their drivers save using GPS tracking. Some of these incentives are designed to differentiate between responsible and irresponsible drivers, while others are designed to help recover lost or stolen vehicles. There are two forms of GPS tracking commonly used by individuals in conjunction with their insurance: driving apps and GPS tracking devices.

Driving Apps

Some insurance companies offer driving apps that can help them to monitor drivers, track their usage, study their speeds and driving habits, and determine whether they are safe or reckless drivers, based on the average of their trips. Apps like this are somewhat limited in their capabilities as they run over the user’s phone instead of monitoring the vehicle directly. The insurance company may be able to acquire data about where the driver has gone, how fast they have traveled, if they have used their phone while driving, etc., but they will not usually be useful in helping police recover a lost or stolen vehicle as they are on the driver’s phone and not always in the car. Even if a car is stolen with a cell phone inside, the thief will likely throw it away or disable it as soon as it is discovered.


GPS Tracking Devices

Independently mounted GPS tracking devices are another, often more beneficial, option for users who want to save. A GPS tracking device in your vehicle generally offers more benefits than a tracking app because the device remains in the vehicle at all times. In addition to tracking trips and driving behaviors, the device you purchase also be able to monitor whether your vehicle has been stolen, determine its location for recovery purposes, and, if a dash cam is included, determine fault in accidents. Because your GPS tracker is generally going to be mounted in a discreet location, it is unlikely to be disabled by a thief.

How much can a GPS tracker save someone?


You may be wondering how using a GPS tracker can result in lowered insurance premiums. Each insurance company will offer different discounts, but the range of discounts has been determined to be between 5 and 40% (Source: USA Today). Apps and trackers that indicate a driver is a safe driver give insurance companies more confidence that covering that person will not be detrimental to them and that if this driver requires a payout, it is not a part of a pattern of poor driving. Monthly discounts are often offered in exchange for the perceived violation of privacy required to allowing your insurance company to monitor your every move. An insurance company will also often save on payouts in the event of a vehicle theft if the GPS tracker in the vehicle allows it to be recovered. These savings then trickle down to the vehicle owner.

How GPS tracking lowers insurance costs


While all of this probably sounds very interesting, you may be asking yourself exactly what the benefits that result in lower insurance premiums are and how the use of GPS tracking results in saved money. This is best explained by showing exactly what those GPS trackers are used for. Keep in mind that your insurance company may have different practices than those listed here. You will have to ask your representative directly to know exactly what is being tracked on your vehicle.


GPS tracking can reduce the risk of theft

For some insurance companies, GPS tracking devices qualify as theft deterrent devices. Sometimes simply placing a sticker on your vehicle that indicates it is loaded with a GPS tracking device is enough to stop a criminal from targeting your vehicle. In the event that the vehicle is stolen, an onboard GPS tracker can help law enforcement recover the stolen vehicle.


Improve vehicle maintenance

Although there are plenty of new vehicles that provide smart dashboard displays to remind you about routine vehicle maintenance, there are still many cars on the road that don’t have these features. Some GPS trackers, usually those that are hardwired into the vehicle, can monitor your vehicle’s performance and provide you with feedback about maintenance and repair needs. Taking care of these issues when they are first noticed can save you thousands down the road.


Encourage more responsible driving habits

Most drivers think they are pretty good at driving, and if asked, typically believe there are a lot of bad drivers on the road with them (Source: Business Insider). When your GPS tracker or mobile app provides you with feedback about your driving habits, you will have a clearer picture of your own driving habits and may discover where you can improve. Awareness of your driving habits, plus an app providing you with specifics, can help. Some of the driving habits that your app or tracker may call to attention are things like harsh braking, speeding, phone use while driving, and more. These habits are easily remediable and, with continued use of the app, you’ll be able to monitor your improvement and see your safe driving practices increase while, hopefully, your insurance premiums decrease.


Decrease risk of accidents

The risk of accidents also decreases with improved driving habits. Insurance companies are aware that drivers who practice safer driving, including not speeding or harshly braking, are less likely to get into or cause accidents. This is the main reason they often incentivize your use of apps and GPS trackers: the fewer accidents their policyholders get into, the less they have to pay out in damages. It’s a win-win for everyone involved!

How to begin saving immediately

We recommend contacting your insurance company to find out what kind of incentive programs they offer, or switch to an insurance company that offers an incentive that appeals to you. Some insurance companies will utilize apps of their own making which remain turned on on your smartphone. Others will offer you all kinds of options, including the option to self-purchase GPS tracking devices and dash cams of your choice to be installed in your vehicle. Once you find out what kind of savings options are offered by your insurance company, you will be able to select the GPS tracking device that provides you with the tools you need.

If saving money is your greatest motivation, you may want to shop around for the best offer. Remember, depending on the insurance provider you could save anywhere from 5 to 40% on your insurance costs. Do your homework, and you could end up with a very good deal.

Updated April 2, 2024