Anti Theft Device In Car Insurance

In India car theft is one of the major issues faced by most of the insurance companies while settling the claims. Earlier the thieves used to steal cars which have plain keys as it was easy for them to steal a less noticed and less guarded car. To check this car manufacturing companies have introduced the keyless system which led to the change in style of the thieves. Thieves started using the black market devices which can overwrite the data or copy the signal of the keyless remote and steal the cars.

As per the report published in 2019, thieves started stealing SUV cars such as Maruti Suzuki Brezza, Hyundai Creta and Mahindra Bolero. In FY 19, the thefts of such vehicles have risen by 15-20% from the previous year to 10000. In India generally less than 2% of the stolen cars are stolen and in the FY 19 the theft claims paid by the insurance companies was Rs1000 crore of the total motor insurance claims paid of Rs.35000 crore.

Thieves seem to prefer the cars which have the high resale value and big SUVs such as the MG HECTOR, KIA SELTOS etc. Most of the theft cases are reported in the National Capital Surrounding areas of Delhi, these vehicles are stolen and resold in the North east or J&K making it difficult for the police to trace these vehicles. Thieves mostly target those vehicles which are in an isolated area and do not have any anti theft devices fitted to them. Let us understand what an anti theft is device and its role in reducing the insurance premium:

Anti-theft device:

An anti theft device is the device which can be installed in any car and in intended to prevent the theft of the car by locking the steering, wheels, brakes or giving out an alarm. There are many devices available in the markets which are passed as anti theft devices and many customers are duped after buying them without any proper research.

It is advisable to verify an anti theft device before making the purchase. Any anti theft device approved by Automotive Research Association of India ARAI which is the autonomous body affiliated to the Ministry of Heavy industries and Public enterprises, Government of India. Some of the anti theft brands approved by ARAI in India are Auto Cop, Minda, Nippon and Xenos. ARAI certifies the anti theft device if it passes the tests conducted by the organization.

In an insurance contract the person who pays the premium for insurance is called the first party and the insurance company is called the 2nd party which settles the claims of the first party car insurance. Car insurance calculation can be done to reduce the premium by opting for Anti theft discount which is available in case your car is fitted with any anti theft device.

These anti theft devices are available in the market to be purchased separately and in recent years most of the high end cars are fitted with any one type of anti devices.

What does an anti theft device do?

Anti theft devices can be installed in your car or you can purchase a car which has an anti theft device installed by the manufacturer. It is advisable for your car to have an anti theft device if it is parked in an isolated area or in a theft prone area. Below are the functions of an anti theft device:

  • Alarm: Anti theft device with alarm feature is the basic type of anti theft device most cars are fitted with. This device is designed to raise an alarm when there is an unauthorized entry or when the vehicle is encroached.  When your car has an unauthorized entry such as breaking glass, sudden movement, perimeter violations the anti theft device will raise an alarm. This is useful if your car is a range where you can hear the alarm and act or someone in the neighbourhood can act.
  • Mechanical immobilisers: Mechanical immobilisers are the cheap anti theft devices available in the market. These include Steering lock, Wheel lock, hood lock, gear lock etc which can be used in addition to any other anti theft device. These kind of anti theft devices are useful if your car is not in an isolated area. Thieves can tow or transport your car and later remove the mechanical immobilisers if any other anti theft device is not installed.
  • Electronic immobilisers: Electronic immobilisers are the built-in transponders which send signal to the ignition and fuel pump system to start the vehicle. The vehicle can be operated only if the proper signals are received and the signals are static. There are some models of cars which start only if the car keys are within the range of the car.
  • GPS Trackers: GPS trackers can be fitted in your car which tracks the location of your car if it is stolen. The GPS tracker offers the real time location of the car thereby making it easier for the police to trace the car. The catch here is that the vehicle should be reported immediately after it is stolen for the police to act and recover the car otherwise there may be chance that the thieves may remove the GPS tracker from the car.

Discount in Insurance premium:

The anti theft devices play an important role in deciding your car insurance premium as the chance of stealing your car is less compared to those cars which do not have anti theft devices installed. In general car insurance companies offer up to 2.5 % t a maximum of Rs.500 if your car is fitted with an anti theft device approved by ARAI. The discount is available only on the own damage section of your car insurance policy and not on the third part section.

Let us understand the premium calculation if the vehicle is fitted with an anti theft device:

  Condition Final Premium
Own Damage premium   Rs.10,000
Less: Anti theft device discount 2.5 % or Rs.500 whichever is less Rs.250
After discount   Rs.9750

The discount given for installing an anti theft device in your car is 2.5% of the own damage premium or Rs.500 whichever is less. Most companies do not ask for the ARAI approved anti theft device certificate before issuing your car insurance policy.

Having an anti theft device in your car reduces the chance of it getting stolen or increases the chances of it getting traced by the police. This in turn reduces the number of claims paid by the insurance company thereby reducing the motor insurance loss ratio of the insurance company. Higher the loss ratio of insurance company, higher would be the premium charged for your car insurance. Car insurance renewal tips discount offered by the insurance company on your car renewal should be reasonable and the quote should be competitive in the market.

Fitting anti theft device after taking insurance:

Most of the old vehicles are not fitted with anti theft devices which have led to the increase in number of vehicles being stolen every year. To curtail this most of the customers have installed anti theft devices in their cars after purchasing the vehicle. After the anti theft device is installed in the car manually you should inform your insurance company which in turn will conduct an inspection of your car. The inspection report is verify whether the anti theft device is approved by the ARAI or not.

If the inspection report is satisfactory the insurance company will refund the amount up to Rs.500 for installing the anti theft device and the same discount can be availed in subsequent renewals. The premium is refunded on a pro rate basis to the customer by the insurance company i.e. refund of premium for the period left in the insurance policy.

For most of the new vehicles, anti theft device is fitted by the manufacturer and the discount can be availed from the insurance company by showing the brochure of that particular car model released by the manufacturer. The car manufacturer uses only ARAI approved anti theft devices to be fitted in the cars.

The cost of the anti theft devices range between Rs. 5000 -15000 depending on the brand and features available in it. This should be considered as a one time investment by the customer to safeguard his interests. Most of the banks & showrooms offer the anti theft devices to its customers at the time of loan sanction or purchase.

How to check if my car has an anti theft device?

It is very easy to check if your car has an anti theft device at the time of purchase. The manufacturer releases a brochure for your car model which has all the features such as anti theft device mentioned in it. This brochure from the manufacturer can be used to get additional discount in your insurance premium.

If you were not able to find the anti theft device in your car you can take your car to the nearest car showroom where they will verify the type of anti theft installed in your car. Vehicles fitted with anti theft devices are preferred by most of the insurance companies as the chance of it getting stolen reduces drastically due to the anti theft device fitted in the vehicle. It is advisable to have an anti theft device fitted for every high end cars such as Brezza, Ciaz, Bolero, Scorpio, HECTOR, SELTOS which are the most preferred models by the thieves.

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