What You Need to Know About Insurance and Car Tracking

Ever wondered what your next moves would be if your vehicle got stolen or into an accident tomorrow? 

These are not pleasant scenarios to think about, and having a plan could make all the difference between simply claiming from your vehicle insurance or paying for damages, replacement parts, or even a brand-new vehicle straight from your pocket. Driving around without the safety net of vehicle tracking or insurance could result in a huge financial blow one day, so why risk it?

Let’s dive into insurance and vehicle tracking and see how they can affect your vehicle’s safety and back pocket.

Understanding the basics of vehicle insurance

As a South African driver, you never know when your vehicle might be stolen, in an accident, or damaged by changing weather. None of these events are in your control, but they can greatly affect your vehicle's safety and your wallet.

Vehicle insurance all starts with your needs. What type of vehicle cover do you want, and which package can you afford?

There are two types of car insurance on the market: third-party fire and theft insurance and comprehensive coverage.

• Third-party fire and theft: This is the more affordable option that ensures that whatever object you collide with during an accident will be fixed, but the downside is that your vehicle won’t be repaired or paid out for. You only get paid out if your vehicle gets stolen or catches fire.
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• Comprehensive cover: This is the cover most motorists opt for, as it covers third-party liabilities plus damages from accidents, vandalism, theft, natural disasters and more. Only a few things aren't covered, like if the insured driver was intoxicated or under the influence of drugs during the accident, if the driver is unlicensed, or if the vehicle is not roadworthy.

To better understand your insurance premiums, let’s first look at the factors that affect them.

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Vehicle insurance premiums and factors that influence your rates

Everything that happens in our country, from crime rates to potholes, seems to have an effect on your premiums. Let’s see what factors have a say in how much you pay for vehicle insurance.

1. Inflation
   A country’s inflation rate influences more than your monthly grocery budget. It also impacts how much you pay for your vehicle’s insurance. This is considered one of the biggest contributors to increased premium rates because inflation impacts vehicle repair amounts and the cost of replacement parts, resulting in increased claim payouts. To make up for this, insurance companies respond by increasing your monthly premiums.
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2. Reinsurance
   Reinsurance is supposed to reduce risks' net liability and protect against catastrophes from large or multiple losses. However, frequent claims due to accidents, higher payouts because of inflation, and high-risk events like riots, power grid failures, and the recent damaging summer hail storms have all contributed to higher premiums.
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3. Repair and replacement costs
   The lack of vehicle parts increases demand, which results in higher prices and insurance premiums. If the global supply chain gets disrupted, there might be a decrease in replacement parts and motor vehicle repair. As a result, parts, labour and equipment prices increased worldwide, resulting in higher insurance rates.
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4. State of roads
   As a motorist, I'm sure you’ve seen the many potholes scattered across multiple roads around South Africa. The lack of road maintenance affects the health of your vehicles, from damaging tyres to leaving scratches on the car or even cutting important wires. This causes drivers to get additional vehicle coverage for rims or tyres because poor road conditions cause increased insurance claims.
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5. Car theft
   The more vehicles are stolen or damaged in hijacking attempts, the more motorists file claims for their lost or damaged vehicles, which results in higher insurance premiums. In 2023, there were 22,742 total carjackings reported. Just imagine how much insurance companies paid out that year!

   While this paints a grim picture of the ever-increasing premiums, insurance companies still try to see the silver lining and give their clients a chance to reduce their monthly vehicle insurance costs by installing a vehicle tracking device.

Relationship between vehicle trackers and insurance rates

While installing a tracking unit on your vehicle is not the answer to all your vehicle insurance problems, it definitely helps and might even significantly decrease your monthly premiums.

Installing a GPS vehicle tracking unit in your cars so you always know the location of your vehicles in real time encompasses vehicle tracking. With the help of telematics, you can also receive vehicle information such as your driving behaviour, your vehicle's odometer rate, any maintenance issues, and how much fuel your vehicle consumes per trip. 

This tool is essential for individuals who want to keep an eye on their vehicle and increase the chances of it being found if stolen, as well as for businesses that want to track their vehicle's movements, monitor fuel consumption, keep up with fleet maintenance and improve driver behaviour habits such as speeding, abrupt braking and harsh turning.

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How does having a vehicle tracker influence your insurance premium?

Having a vehicle tracking device is often advised, as it positively influences your insurance premiums. Insurance companies tend to offer drivers lower premiums if they own a tracking unit. 

Why?

• Tracking devices can reduce the chances of vehicle theft, or if theft occurs, they can increase the chances of your vehicle being found and retrieved, thus making these vehicles less risky to insure. Insurance companies will be less likely to pay out a full claim in case of theft.
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• Installing a tracking unit tells your insurance company that you’ve done your part in protecting your vehicle and that your vehicle’s safety is a priority.

While having a tracking unit won’t magically grant you free vehicle insurance or massive discounts, it could significantly decrease your premium and make it more affordable.

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Back-up unit trend

A new trend in town has motorists going back to their vehicle tracking companies asking for seconds. That's right, insurance brokers have started asking their customers to fit an additional vehicle tracking unit into their vehicles as an extra safety measure. Here’s why.

After a vehicle has been stolen, most criminals get to work by immediately searching for the installed vehicle tracking unit to remove it or block its signal with a jammer, so authorities or vehicle tracking companies have difficulty tracking down the vehicle. With two trackers installed, the vehicle is more likely to be found. 

While criminals search for the first unit and try to remove it, the second one gives authorities a bit of time to lock down the vehicle’s location and hopefully recover it in one piece, increasing stolen vehicle recovery and positively impacting vehicle safety. 

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Cartrack provides a two-in-one solution for motorists

Cartrack is your trusted partner in fleet management, vehicle tracking and insurance. Our trusted vehicle safety solutions include all the essential features any driver needs to safeguard their vehicle:

• Real-time vehicle tracking
• CarWatch
• Geofencing
• Protector
• 24/7 control room support
• Skilled on-the-ground and air recovery agents

On top of our list of premium safety features, our industry-leading solutions extend to providing drivers with premium, comprehensive coverage that can be tailored to their needs.

‍Cartrack Insurance Agency is our very own independent financial brokerage that does all the insurance scouting for you. From the many insurance companies we’ve partnered with, we can provide up to 15 insurance quotes ranging from comprehensive insurance for major incidents to third-party coverage.

Make vehicle peace of mind your new normal with Cartrack

Let Cartrack help you find the right insurance company for your vehicle and your budget. Contact Cartrack now, and we’ll provide you with 15 free insurance quotes to choose from. 

Invest in reliable vehicle tracking and partner with a trusted insurance company to enhance your vehicle’s safety.