In today's world, theft is a growing concern across Canada and the US, for everyday people and in business targeting various industries, prompting insurance companies to take proactive measures to mitigate risk. One emerging trend is the increasing demand for GPS tracking devices to be installed in insured assets. These devices offer a practical solution to combat theft by providing real-time location tracking and asset recovery capabilities. In this article, we will explore the reasons behind insurance companies' rising interest in GPS tracking devices and the benefits they offer in addressing the challenges posed by increasingly high levels of auto theft, and theft in general.
Escalating Rates of Theft
Theft is a significant issue affecting families as well as numerous industries, including automobile, construction, logistics, and retail. In 2019, according to the Insurance Information Institute, approximately 748,841 reported vehicles were stolen across North America. That equals 2052 per day or 85 stolen cars per hour. The frequency and severity of theft-related incidents have compelled insurance companies to re-evaluate their risk management strategies. Traditional methods of assessing risk based solely on historical data are proving insufficient in dealing with the dynamic nature of theft. GPS tracking devices offer a technological solution that enables insurers to actively monitor and safeguard insured assets.
Enhanced Asset Recovery and Reduced Losses
By incorporating GPS tracking devices into their policies, by mandating them or requesting them for certain lines or situations, insurance companies can significantly improve the chances of asset recovery in the event of theft. Real-time location tracking enables swift response and collaboration with law enforcement agencies to recover stolen assets. This proactive approach helps insurance providers reduce their claim payouts and minimize losses associated with stolen property. These savings can be passed onto consumer or business insurance customers, in the form of discounts and/or decreased premiums.
Deterrence and Risk Mitigation
The mere presence of GPS tracking devices acts as a deterrent to potential thieves. The site of a ‘Protected by GPS’ sticker or etching lets criminals know that the asset is being tracked, which is likely something they do not want to take the time or risk to deal with. The knowledge that assets are equipped with traceable technology can discourage criminals from attempting theft in the first place. This preventive effect reduces the likelihood of claims being filed and, consequently, lowers insurance premiums for policyholders. Insurance companies recognize the value of implementing proactive measures to mitigate risk and maintain stable premiums.
Accurate Risk Assessment and Premium Determination
Insurance premiums are calculated based on risk assessment. With GPS tracking devices, insurers gain access to real-time data that provides insights into asset location, usage patterns, incident data, driving behaviour other potential risks, and vehicle information. This granular information allows insurance companies to accurately assess the risk associated with insuring specific assets or individuals against other factors such as regionality, past records, asset usage, etc. Consequently, policy premiums can be more accurately tailored to the actual risk profiles of insured parties.
Customized Insurance Solutions
GPS tracking devices enable insurance companies to offer innovative and flexible insurance products. By incorporating theft recovery potential and location-based data into their policies, insurers can customize coverage options and pricing structures according to the specific risk profile of each policyholder. This level of customization ensures fairer premiums and better coverage, as policies align more closely with the actual risk exposure.
Insurance companies are increasingly collaborating with technology providers specializing in GPS tracking solutions. These partnerships facilitate the seamless integration of tracking devices into insured assets and ensure reliable data transmission and asset monitoring. By leveraging the expertise of GPS tracking technology companies, insurers can offer comprehensive theft protection solutions that cater to the unique needs of their clients.
In an era marked by rising levels of theft, insurance companies are embracing GPS tracking devices as an effective means to combat this challenge. These devices offer enhanced asset recovery, act as a deterrent, enable accurate risk assessment, and provide the foundation for customized insurance solutions. By leveraging the power of location-based technology, insurance companies can better protect their client's assets, reduce theft-related losses, and ensure fairer premiums. As the technology continues to advance, the adoption of GPS tracking devices by insurance companies is expected to become more prevalent, creating a safer and more secure environment for insured assets.