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Does GPS Tracker Reduce Car Insurance?

Fleet Tracking Software

When it comes to car insurance, it’s pretty unlikely that one of the first things you might think of is a GPS tracker. Instead, you might think of how much you wish you could find a way to reduce car insurance costs. What you might not realize is how the two might be related, or what role a GPS tracker might play in your car insurance. This is the story of how the two are related.

How do insurance companies determine who is at fault?

Our story starts with an accident. Whether you hit someone or another driver hits you, anytime you are involved in an accident, your car insurance companies will likely want to determine who is at fault. What you may not realize is that a GPS tracker might help them solve that precisely.

See, there’s a complicated web when it comes to determining fault. Not only do different states have different laws about fault and car insurance, but different car insurance companies also work with each other to determine how fault is allocated between different drivers, for instance, in a multi-car accident.

Now, a big part of determining fault is investigating the circumstances of the accident itself. If anyone involved in the accident has a GPS tracker, however, that can help better determine exactly how that driver behaved—how fast they were driving, how hard they braked, and so forth.

As a result, a live GPS tracker or insurance tracking device box can go a long way in determining fault in an accident. Let’s take a closer look at insurance tracking device boxes.

What is an insurance tracking device box?

Let’s use Progressive’s program, known as Snapshot, as an example. The GPS tracker is connected to your on-board diagnostic (OBD) port, where it tracks not just your location, but also your driving habits so the car insurance company can get a better sense for how you drive. The device tracks a wide range of driving behaviors, including your driving speeds, the times at which you drive, how often (and how hard) you accelerate or brake, and more.

One of the best reasons to consider using an insurance tracking device box or similar GPS tracker is for the data it can store, data that can help demonstrate that you are a safe driver. Additionally, this data may help reduce car insurance costs for you if you find the right program—sometimes up to 30% or more. Let’s look at how the insurance boxes work.

How do insurance boxes work?

We’ll look at Progressive’s Snapshot as our example. The Snapshot device gets plugged into the on-board diagnostic (OBD) port which gives it access to your car’s computer. From there, Snapshot tracks real-time data for the car insurance company, data like the miles you drive, the times at which you drive those miles, how fast you drive, how hard you brake (or accelerate), and more. If the Snapshot data shows you are a good driver, you may be eligible for a better price on your car insurance, and if you can reduce car insurance costs, wouldn’t you want to consider it?

While Snapshot theoretically isn’t a GPS tracker—Progressive says they don’t track your location—it still compiles some very specific information about how you drive. Snapshot is set up so you use the device for six months, with a review at three months and another review at six months. After each review, your policy premium might go down—if the data supports it, that is. If your Snapshot data shows you’re a great driver, you should get a discount, and that discount gets applied to your next premium payment. So being a safe driver can help you reduce car insurance premiums—if you’re willing to try a program like Snapshot.

And if you’re not a great driver? Snapshot shouldn’t result in higher premiums, as your car insurance costs are already based on default assumptions about who you are as a driver. 

As to whether or not you want to try a car insurance program like Snapshot, that’s something you’ll have to determine for yourself. Is it worth giving up privacy? Maybe, or maybe not. Even if the program you use doesn’t include a GPS tracker, you’re still giving up a lot of data. And, though Snapshot says it doesn’t record GPS data, many car insurance programs do include a GPS tracker. That said, sometimes the benefits might outweigh the risks. Let’s look more generally at some of the benefits next.

What benefits do car insurance companies offer if you use a vehicle tracking device?

As previously mentioned, using a car insurance black box or GPS tracker can help you reduce car insurance rates—sometimes up to 30% or more. But what other benefits might you be eligible for if you use a car insurance GPS tracker program?

Check out some of our favorite reasons to use a GPS tracker to reduce car insurance costs:

  1. Car insurance companies may actually pay for you to install a GPS tracker. Not only will the GPS tracker itself offer benefits, but anything that will reduce car insurance costs sounds pretty great to us!
  2. Vehicles with a GPS tracker are easier to recover if stolen, which in turn cuts down on the likelihood of a vehicle never being recovered—in which case the car insurance company might have to pay out on a hefty theft claim. No wonder so many car insurance companies offer discounts for drivers with a GPS tracker or anti-theft device.
  3. Car insurance companies know that when company vehicles are equipped with a GPS tracker, employees are less likely to misuse the vehicle, whether in service of personal use or simply in an unsafe manner.
  4. Car insurance companies also know that vehicles with a GPS tracker are more likely to get prompt and regular maintenance, which also helps cut down on accidents, thus cutting down on claims.
  5. Drivers with a GPS tracker on their vehicle are in fewer accidents because they tend to be safer drivers. As a result, car insurance companies know that they will have to pay out fewer claims—by 20 percent or more, in fact.

For instance, Geico offers customers with a GPS tracker up to 25 percent off, Nationwide offers anti-theft discounts (for which some GPS tracker devices are eligible), and 21st Century offers 15 percent discounts. As a result, getting a GPS tracker if you don’t already have one can readily pay for itself.

Geico GPS tracking discount

Like several other car insurance companies, Geico offers a discount for drivers who have an anti-theft device such as a GPS tracker on their vehicle—up to 25 percent off your car insurance plan. Here’s the thing, though: You know how we pointed out all of the other ways that a GPS tracker can make you a safer driver? That means you may also be eligible for other discounts, giving you other ways to reduce car insurance costs with Geico—such as up to 26% off for being a good driver (as defined by five years accident-free), 15% for seat belt use, and more.

What does the Liberty Mutual Right Track do?

Liberty Mutual offers discounts of up to 30% for using Right Track. If you’re looking to reduce car insurance costs, that’s a significant reduction—and the program is as simple as using the Liberty Mutual insurance box GPS tracker in accordance with the program guidelines.

In particular, Right Track tracks mileage driven each day, braking and acceleration, and nighttime driving. You’re guaranteed a savings of at least 5% just for enrolling in the program; that’s one way to reduce car insurance costs no matter what!

The Right Track program is as simple as enrolling, downloading the app, placing the tag on your windshield (and linking the tag with your app), and then simply driving for 90 days. Liberty Mutual then uses the data from those 90 days of driving to adjust your premiums to better reflect your risk, meaning you reduce car insurance costs simply by using a GPS tracker.

Top 7 ways reduce car insurance

Of course, Geico’s GPS tracker discount and Liberty Mutual’s Right Track program are hardly the only ways to reduce car insurance. There are other great ways to cut costs, too; these are our top 7 ways to reduce car insurance:

  1. Increase your deductible. Yes, this means that in the case of an accident you will be on the hook for a higher bill—but on the flip side, if you aren’t ever in accidents, that’s immediate savings as you reduce car insurance costs. This only works, though, if your long-term costs will be lower courtesy the savings; if you’re accident-prone, this isn’t an option for you.
  2. Shorten your commute. If you spend less time driving to and from work, you can expect less expensive car insurance; one of the biggest determining factors of car insurance cost is regular mileage, as well as when you drive. During rush hour, for instance, is one of the riskiest times to drive, so if you don’t have to drive then, you’re less of a risk for car insurance companies.
  3. Compare costs with other car insurance providers. Yes, many car insurance providers offer loyalty discounts. They also, however, have a tendency to slowly raise prices over time, knowing that most customers won’t go looking for better rates elsewhere. Here’s the thing, though: There’s always some company that is offering discounts or slashed pricing to try and attract new customers, and you can reduce car insurance costs by taking advantage of that.
  4. Enroll in a defensive driving course. If you have a good driving record, the cost of the course may be greater than any savings you might realize. If your driving record is subpar, however, a quick way to reduce car insurance costs can be a good defensive driving course. Just make sure the savings will outweigh the cost first.
  5. Pick an insurance-friendly car. While you certainly have a right to drive the car you want, you should know that some models are simply going to be more expensive to insure than others. For instance, any sports car or expensive car will be more expensive to insure simply as a result of the higher vehicle value—as well as risk factors of other drivers who might buy a similar vehicle. Similarly, red and other brightly-colored vehicles are often more expensive to insure. On the flip side, vehicles with various safety features (such as anti-theft devices, anti-lock brakes, and more) can help you reduce car insurance costs.
  6. Drive safely. A clean driving record is a great way to reduce car insurance costs; nearly every car insurance company offers discounts for driving safely. Even if you have a speeding ticket or two on your record now, keep in mind that most states expunge those records after a couple of years.
  7. Boost your credit score. One way to reduce car insurance quotes next time you go comparison shopping is to boost your credit scores, as insurance companies generally assume that better credit means less risk. The biggest savings are available if you go from poor credit (580, for instance) to good credit (a score above 700, for instance).

As you can see, a GPS tracker is hardly the only way to reduce car insurance costs. Any one—or several in combination—of the above options is a good place to start!

Resources:

  • https://www.thezebra.com/auto-insurance/how-is-fault-determined-car-accident/
  • https://www.esurance.com/info/car/how-fault-is-determined-after-a-car-accident
  • https://www.insurancehotline.com/resources/fault-determination-after-an-accident-what-you-should-know/
  • https://cars.usnews.com/cars-trucks/car-insurance/how-do-those-car-insurance-tracking-devices-work
  • https://www.amfam.com/resources/articles/understanding-insurance/car-insurance-tracking-device
  • https://www.moneycrashers.com/would-you-put-a-tracker-in-your-car-to-save-on-auto-insurance/
  • https://www.moneysupermarket.com/car-insurance/how-does-black-box-insurance-work/
  • https://www.wexinc.com/insights/blog/fleet/how-gps-vehicle-tracking-can-lower-your-insurance-premiums/
  • https://source.wustl.edu/2019/04/study-analyzes-benefits-of-tracking-devices-for-auto-insurance/
  • https://www.gpsinsight.com/gps-tracking-benefits/how-gps-fleet-tracking-can-help-lower-insurance-costs/
  • https://www.geico.com/save/discounts/car-insurance-discounts/
  • https://www.compare.com/auto-insurance/guides/righttrack-telematics
  • https://www.libertymutual.com/righttrack
  • https://www.moneyunder30.com/ways-to-lower-your-auto-insurance-premium