Tracking The Logic Of Insurance

So a while back, I decided that it might be a good idea to consider a tracking system for my car as it would be a “win-win” for both myself and the insurance company. I as the client, would experience a quicker turn around time if my car was stolen, my premium would probably be cheaper and the insurer would get the ability to track my vehicle. Which meant they would take less of a financial loss in their favor, by retrieving the vehicle instead of writing it off. I’m pretty sure the chances of finding and retrieving your car before it’s lost or stripped to a bare metal shell is slim to none without a tracking system. In fact, that’s almost a certainty.

Apparently, I was misinformed and to be honest I’m not sure I understand the logic behind it. After much deliberation with the insurer, my total premium, didn’t reduce in cost, it was going to increase if I got the tracking system installed. Yes, the insurance portion decreased a little bit but the cost per month of the tracking system itself far exceeded the discount offered by the insurance company. Surely the insurance company benefits from reduced administration, resources, claims and overhead costs by being able to recover the vehicle quickly? Am I wrong here? I don’t have the answer to that and there isn’t much information online to justify the process so it’s still up in the air. Why would I as the insuree pay a higher premium for something that I feel benefits the insurance company more than it does me as the customer. It should be a VAS (value added service) that does reduce your premiums to the point where the tracker’s cost is at least absorbed in its entirety. Maybe more people would consider moving to an insurance company that offers value added services that really do reduce your premiums for taking steps to be more proactive with security instead of making it almost ludicrous to consider.

At the end of the day, it’s about managing perceptions and expectations. For now, in my opinion it seems logically feasible depending on the business model, until someone clarifies otherwise. Obviously we are talking about the home sector of the market here. From a business / commercial perspective in terms of logistics, having a tracking system has benefits that far outweigh the cost of an increased premium and it does make sense to invest in it. Think about it though, isn’t there just as much potential for the insurance companies to close that gap, save costs, make themselves more attractive in the market and improve operational efficiency by making tracking systems more cost-effective for owners of private vehicles? I’m hoping there’s an insurance company with the foresight to see the potential here.


One thought on “Tracking The Logic Of Insurance

  1. Maybe because you have a tracking device installed in your car ipso ergo (google it) this means there are individuals that know when you are not home, (in fact they know exactly how far you are from your home), therefore making your house (or rather it’s contents) more vulnerable ?

    With the current level of corruption apparent in the SAP, who are meant to uphold the law, how can you trust some strange dude sitting at a monitor, watching your car pinging off a sattelite, when you don’t know who he has coffee with that is prepared to pay a pittance for valuable information.

    Maybe, maybe not, call me a conspiracy theorist then if you like but how do you think the rebel alliance found the death star…

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