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Auto Insurance Article

How Technology is Making Car Insurance Cheaper

Do you like high-tech gear? If so, you'll love these gadgets even more when you find out how it could reduce your car insurance rate.

By Terence Loose    

Do you think modern technology is only beneficial for surfing the Web and watching movies in 3D? Guess again. High-tech gadgets could also help lower your car insurance rate.

The technology ranges from the very common, like automatic seat belts and airbags, to the futuristic, such as smart devices that monitor your driving habits.

And while not all auto insurance companies offer every high-tech discount, it still could be worth your time to check out these tech-savvy savings options.

Savings #1 - Data Tracking

Do you want to show off your safe driving habits? Now, thanks to high-tech devices that monitor your driving abilities, your auto insurance company could observe your driving practices. And the upshot: a possible discount in your premium.

These devices are designed to benefit safe, defensive drivers, says Loretta Worters, a vice president with the Insurance Information Institute (III).

For instance, Worters says, "Progressive's newly updated Snapshot program offers a discount to drivers in about 30 states who use a monitor that tracks mileage and times of the day the vehicle is used, along with driver behaviors such as how quickly the car speeds up and slows down."

After 30 days, if users show they are safe drivers, they can earn up to a 30 percent discount on their premium, though it averages 10 to 15 percent, Worters says.

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Savings #2 - Electronic Stability Control (ESC)

Here's something that doesn't take a lot of high-tech gadgetry to figure out: a car rolling over is going to result in injury and damage.

Hence, cars equipped with Electronic Stability Control (ESC), a technology that helps steer the car once it senses a loss of driver control, could lower your car insurance rate. Why? Because ESC has been proven to greatly reduce the risk of injury, Worters says.

"In June 2010, the Insurance Institute for Highway Safety (IIHS) released the findings of a study that found that ESC for passenger vehicles is one of the most effective technologies for the prevention of fatal crashes, especially rollovers," says Worters.

It's so impressive, in fact, that ESC is now required to be in every passenger vehicle from 2012 forward, according to the IIHS website.

But if you're not in the market for new wheels, don't flip. Your car may still be equipped with ESC. To find out, take a look at the search tool on the IIHS website.

Savings #3 - Anti-Theft Devices

Do you worry about your car being stolen? Well, probably not as much as your insurance adjuster, who worries about the insurance company having to pay to replace your stolen car. That's why many insurers offer discounts for devices that prevent auto theft.

"Insurers look to see what layers you have to deter a car theft. The more layers of protection, the better off you are," says Worters. Layers include such elements as sound and light alarms, and other devices that make it difficult for thieves to steal your car.

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"Electronic devices which immobilize a car by shutting off a portion of the electrical or fuel system make it difficult, if not impossible, for a thief to steal a car," says Worters. These immobilizers can be activated through a small radio device or via a built-in system that detects an intruder tampering with your car, she adds.

And if you want a low-tech way to protect your car, Worters suggests always parking in a well-lit space. But this one probably won't get you much of a discount on your insurance.

Savings #4 - Stolen Car Recovery Devices

Despite all the bells, whistles, and lights going off, cars can still get stolen. That's why many insurers offer a discount if you install a car recovery system. The most common one is LoJack, which hides a small radio-frequency transceiver in the car.

"Once the theft of a LoJack-equipped car is reported as stolen and entered into the police database, the transmitter emits a signal that law enforcement tracks. More than 90 percent of LoJack-equipped cars are recovered, hence discounts are significant for those who use this technology," says Worters.

How significant? It varies by state and company, says Worters, but discounts often run 15 to 20 percent for devices that automatically activate when you lock your car.

"Combining an anti-theft device with a vehicle-recovery system, such as LoJack, can net you at least a 25 percent discount in a state like Massachusetts. But again, every state is different," says Worters.

Savings #5 - The Internet

That high-tech thing called the Internet could save you money on more than just books and long-distance phone calls. It could also decrease the cost of your car insurance premium.

The Web can provide online discounts when signing up for an insurance policy. After searching a few different insurance company websites, it was revealed that some companies offer one-time discounts of $50 or even $100 for purchasing your insurance online.

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And even if you don't sign on the electronic line, the Web still could save you money by shopping for rates. "One of the benefits of online shopping for auto insurance is that it allows you to compare prices and coverage," says Worters.

But remember, the lowest price doesn't mean the best insurance, according to Worters. Different companies offer different types of coverage.

Finally, says Worters, when shopping online, make sure to check a company's financial stability. You want your car insurance company to be available and trustworthy when you need assistance.

*All discounts are not available from all insurers, and amounts vary with coverage and carrier.

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